International Paper agrees to sell India-based paper business

International Paper, Memphis, Tennessee, has entered into an agreement with West Coast Paper Mills Ltd. to sell its controlling interest in International Paper APPM Ltd. (APPM), an India-based paper business. According to a news release from International Paper, IP currently owns about 75 percent of the outstanding shares of International Paper APPM Ltd. 

The transaction is expected to be completed by the end of the year, subject to satisfaction of customary closing conditions, including obtaining required governmental approvals and West Coast Paper Mills’ (WCPM) launch of a tender offer, International Paper reports in a news release. The closing of the transaction will occur following the completion of the tender offer and receipt of antitrust clearance. Once the transaction closes, WCPM will be responsible for the operations of APPM and International Paper will be a passive investor. 

Pursuant to Indian securities law requirements, WCPM will launch a tender offer to acquire up to all the APPM shares owned by the public, which represents 25 percent of APPM’s outstanding shares.  

“As part of our strategic assessment of the IP portfolio, we have decided to exit our position in IP APPM,” says Mark Sutton, chairman and chief executive officer. “This decision is a reflection of our continued focus on growing our global packaging and cellulose fibers businesses. Our paper business continues to perform well in India, and we wish the team there the very best in the future.”

International Paper’s decision to exit from APPM reflects its focus on expanding its global packaging and cellulose fibers businesses. International Paper reports that in the global cellulose fibers business, global pulp demand has been steadily strong and demand in the fluff segment has picked up.