International Paper Company : International Paper Arranges To Sell 3 Containerboard Mills For $470 Million
06/01/2012| 07:46am US/Eastern
International Paper Co. (IP) struck pacts to sell three U.S containerboard mills for roughly $470 million to meet regulatory requirements tied to its acquisition of rival Temple-Inland Inc. earlier this year.
The paper-and-pulp company completed its $3.48 billion acquisition of Temple-Inland in February in a deal expected to expand its share of containerboard used to make corrugated cardboard boxes.
To obtain approval from the Department of Justice, International Paper agreed to divest two former Temple-Inland Mills and one of its own mills in California.
Noting Friday it conducted a "robust" auction process, the company said it has arranged to sell one mill to packaging and construction products firm Hood Companies Inc. and the other two to New-Indy Containerboard LLC, a newly formed joint venture of holding company Kraft Group LLC and Schwarz Partners LP.
The $470 million combined value of the sale agreements excludes working capital.
"We are pleased to have reached these agreements within the timeline established in our settlement with the DOJ," said Chief Executive John Faraci. "The purchasers are experienced operators in the paper, forest products and packaging industries, and we look forward to working with them to close these transactions in a timely manner."
The company in April reported its first-quarter profit slipped 47%, as lower prices for paper and packaging products squeezed margins and offset higher sales from the Temple-Inland acquisition.
Shares closed Thursday at $29.20 and were inactive premarket. The stock is down 17% in the past three months.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207; email@example.com