Madison Dearborn to Buy Packaging Firm

Madison Dearborn Partners Inc., a leveraged buyout firm, has agreed to buy Jefferson Smurfit Group for $3.5 billion, its fifth takeover of a packaging company and its biggest investment.

The takeover would be the latest purchase of a paper company by an acquisition firm betting that profit will grow as the economy expands. Dublin, Ireland-based Jefferson Smurfit would make Chicago-based Madison Dearborn the world’s biggest producer of container board, used to make boxes and packaging.

Madison had bought Riverwood Holding Inc., Bay State Paper Holding Co. and Buckeye Cellulose Corp. It acquired a majority stake in the container-board and corrugated-packaging business of Tenneco Inc. in 1999 and took it public as Pactiv Corp. the following year.