International Paper will sell three containerboard mills and four box plants to Brazilian firm Klabin
International Paper produces fiber-based packaging, pulp and paper products. (Credit: International Paper Company)
International Paper, a US-based producer of renewable fibre-based packaging, pulp and paper products, has agreed to sell its Brazilian corrugated packaging business to Brazil-based paper producer, exporter and recycler Klabin for BRL330m ($64.6m).
Under the terms of the deal, Klabin will pay BRL280m ($54.8m) to International Paper at closing and BRL50m ($9.7m) one year after the completion of the deal, subject to certain adjustments.
International Paper to divest three containerboard mills and four box plants
The assets considered for the sale include International Paper’s three containerboard mills and four box plants. The deal forms part of International Paper’s strategic review of its Brazil packaging business.
Subject to certain closing conditions and regulatory approvals, the deal is planned to be completed in the second half of 2020.
International Paper, however, plans to continue to operate its Papers and Forestry businesses in Brazil.
Last year, International Paper acquired packaging businesses from DS Smith. The sale will fulfil DS Smith’s commitment concerning the clearance of €1.9bn (£1.7bn) acquisition of paper and packaging products manufacturer Papeles y Cartones de Europa (Europac).
Recently, Klabin has commissioned a new corrugated board packaging manufacturing facility in Horizonte, Ceará, Brazil, to expand its business.
Located 35km from Fortaleza and 90km from the Port of Pecém, the new industrial unit will receive the recycled paper from Klabin’s Goiana Unit located in Pernambuco, and virgin fibre from its units located in Paraná and Santa Catarina.
Klabin said that the fully recyclable corrugated board packaging is made from its certified pulp extracted from sustainable and renewable sources.