Packaging Corp. of America's announcement Monday that it plans to buy struggling Boise Inc. in a cash deal worth nearly $2 billion has raised concerns about the fate of Boise's paper plant in International Falls.

Illinois-based PCA is best known for making boxboard and corrugated packaging products, while the smaller Boise makes copier paper, liner board and corrugated packaging products. But copier paper is the primary product for Boise's International Falls plant, putting it at increased risk for cutbacks. In May, the factory announced that it was reducing staff as electronic correspondence such as e-mail and text messages clipped demand for paper.

"The question is whether Packaging Corporation of America wants the copy-paper portion of [Boise's] business," said Wayne Gjerde, recycling market development manager for the Minnesota Pollution Control Agency. "I am really concerned that we maintain our container board and paper capacity here. That [provides] a lot of our jobs."

Officials from PCA did not return calls for comment. Boise spokeswoman Karen Blanchard would only say, "Boise's intent is business-as-usual until the transaction closes. I can't speculate about what PCA's plans might be."

Pending regulatory and shareholder approvals, PCA's acquisition of Idaho-based Boise is expected to close during the fourth quarter. Combined, the two companies would generate $5.5 billion in annual revenues, $879 million in profits and cut about $105 million in annual costs. It is not clear from where those cuts would come.

With the shift to digital and other factors, Minnesota's paper industry has already been devastated, Gjerde said. The Verso paper mill in Sartell was lost to an explosion last year, and Wausau Paper closed its Brainerd plant in April, laying off about 130 workers.

In May, Boise announced it would cut 265 workers, keep 580 others and shut down two paper machines and one coating machine at its International Falls plant. The cuts, which will be finalized by the end of this month, will reduce the plant's white paper production by roughly 10 percent.

With PCA entering the picture, nearby residents and city officials are worried about the possibility of steeper cuts. Boise's existing staff reductions already are expected to take away $15 million to $20 million in wages and spending from the local community, said International Falls Mayor Bob Anderson.

"There is certainly the sound of skepticism in folks' voice. They are looking for some assurance as to what this [PCA's acquisition] will mean," Anderson said. "Change is always challenging and always unsettling. Over the next two or three months we hopefully will get a chance to visit with the folks from Packaging Corp. of America" and get some idea of their plans.

Anderson said he remains optimistic that the acquisition will not hurt his town. He worked in the Boise plant for 51 years and remembers making specialty paper for PCA many years back. "I think this is a good omen and a good fit. … Maybe this paper mill could be purchasing cartons from its own company," he said, noting that Boise now has to buy corrugated boxes from various suppliers to ship its paper.

With about $3 billion in annual revenue, PCA is the fourth-largest maker of corrugated packaging products in the country. It boasts four paper mills and 71 corrugated paper plants in 26 states. Boise is smaller, with $2.6 billion in 2012 revenue and plants in 17 states, Mexico, Spain, France and the Netherlands.

In a news conference with Wall Street analysts Monday morning, PCA Executive Chairman Paul Stecko called the acquisition "an excellent fit."

Boise Board Chairman Carl Albert acknowledged that "Our board and management team have thoroughly evaluated a broad range of strategic options for Boise, and we believe this transaction is the best way to maximize value for our shareholders."

Boise CEO Alexander Toeldte said that PCA's interest in Boise "is a testament to the performance delivered … in our five years as a public company and the value we have created in a very challenging economic environment."

With Boise on board, the new PCA would derive about 75 percent of its sales from packaging products and 25 percent from Boise's paper business.

Under the terms of the agreement, PCA will acquire all of the common shares of Boise for $12.55 per share in cash, for a total value of $1.995 billion. That amount includes $714 million of Boise's outstanding debt.

Dee DePass • 612-673-7725