The spin-off is being planned to boost International Paper’s profitable growth in industrial packaging in North America and Europe, the Middle East and Africa
International Paper (IP) has unveiled plans to spin-off of its printing papers segment to focus more on its industrial packaging segment.
A standalone and publicly traded company (SpinCo) will be formed due to the spin-off of IP’s printing papers segment. The deal will enable to create two streamlined companies for long-term success.
IP aims to boost profitable growth in industrial packaging in North America and Europe, the Middle East and Africa, in addition to enhancing its global cellulose fibres business. The company will continue its joint venture with Ilim Holdings in Russia.
The newly formed company will be managed by industrial packaging current senior vice president Jean-Michel Ribiéras in the role of CEO. It will serve key geographies such as North America, Brazil and Europe.
The transaction will be implemented via the distribution of new company shares to IP shareowners.
IP will hold up to 19.99% of the shares of the new company at the time of the separation, with an aim to monetise and offer additional proceeds to the company.
Upon completion of the deal, IP expects to have $17bn in sales, 85% in industrial packaging and 15% in global cellulose fibres.
The company will have 20 containerboard mills with 14.5 million tonnes of annual capacity, 220 converting facilities, 350 packaging designers, 3,500 packaging formers at customer locations and 20,000 customers.
The proposed spin-off is subject to customary conditions, including final approval by IP’s board of directors.
IP chairman and CEO Mark Sutton said: “We remain committed to producing sustainable products that people depend on every day and accelerating value creation for International Paper and our shareowners. This transaction represents a logical next step as we continue to build a better IP.”
In July 2019, IP completed the acquisition of DS Smith’s two packaging businesses in North Western France and Portugal for €63m.