If you’ve felt like packaging industry M&A activity has been muted so far in 2026, your instincts are correct. Various economic and geopolitical factors mean activity has “skewed selective,” according to a newly released report from investment banking and financial advisory firm Capstone Partners.
Inflation and sluggish consumer spending are major factors, the report says. Earlier this year, other analysts flagged that the war with Iran also is dampening M&A activity.
Through the second quarter of this year, the paper and packaging industry has charted a 21.3% decrease in the number of M&A deals, compared with the same time last year, according to the Capstone report. Comparatively, the broader industrials sector has experienced a 12.1% increase.
The muted M&A environment underscored a broader trend of companies being cautious with their capital allocations. They’re focusing on navigating uncertain conditions and preserving financial flexibility until growth visibility improves, the report says. “[O]verall growth visibility remains limited, reinforcing cautious buyer behavior and a defensive posture in packaging M&A.”
Despite subdued transaction volumes, average deal values have “remained robust” this year so far, showing that “buyers have continued to target high-quality assets and resilient business models even amid challenging macroeconomic conditions.” The enterprise value paid in 2026 has averaged $164.4 million, up from $60.4 million during the same period in 2025.
The average enterprise value/earnings before interest, taxes, depreciation and amortization multiple for packaging transactions fell to 6.5x, a steep drop from 10.3x for full-year 2025. The historical average from 2018 to 2026 is 9.3x.
Where deals are happening
Strategic buyers remain the most interested in pursuing deals, as has been the case since the COVID-19 pandemic, according to the report. Private, public and hybrid buyers are dominant, representing 83.1% of all M&A activity.
However, these groups also have seen the largest pullback in transaction volumes this year. The number of private strategic transactions in 2026 are down 29.7% from last year, and hybrid deals dropped 26.6% year over year. Public strategic volumes grew by one deal, and private equity decreased by one deal.
“This shift has reflected buyers’ preference for defensive strategies and scale-driven consolidation that can drive operational improvements,” the report says.
Performance across the paper and packaging industry has diverged, with many companies lagging while “a subset of companies have achieved above-market growth” via strategies such as technology differentiation or targeting niche end markets, the report says. That’s contributing to uneven interest in M&A across the packaging industry.
“[W]e have been seeing more than a few entrepreneurial producers who have developed either a technology forward product, the right distribution strategy, or the unique market niche that is driving above market growth. These will be the winners going forward,” said Jonathan Mishkin, managing director at Capstone Partners, in the report.
The packaging industry also is capital-intensive and cyclical, so large, incumbent producers tend to fare better, the report says.
“Scale, in this context, functions as both a strategic enabler ... and a defensive mechanism, allowing leading operators to consolidate weaker competitors and emerge stronger as demand stabilizes,” the report says.
Boxed out of M&A activity
Challenges within the corrugated market have made the sector particularly sensitive to uncertainty that plays into depressed M&A activity.
North American box shipments dropped 1.9% year over year in Q1, according to Fibre Box Association data, and containerboard production fell 8% year over year in Q1, according to American Forest & Paper Association data. These conditions follow the industry’s historic, nearly 10% cut in production capacity during 2025. And input costs are up notably in 2026, prompting fiber producers to announce numerous price increases.
Glimmers of improving market health have emerged as 2026 progresses, and during recent earnings calls some company executives cited signs of improving demand in Q2. But containerboard production still declined 2% year over year in Q2, according to AF&PA.
“Corrugated box manufacturers have long been among the most economically sensitive participants in the packaging ecosystem, with demand closely linked to goods consumption and industrial activity,” the report says.
Even so, Capstone points to some notable deals that have occurred in corrugated this year. For one, International Paper acquired North Pacific Paper Co. in June for $360 million. And private equity firm Kingswood Capital Management acquired Coveris’ paper business unit.
