International Paper in talks to divest 5 European box plants

International Paper has reportedly entered exclusive negotiations with German paper company Palm Group for the purchase of five IP corrugated box plants in Europe.

The facilities include: three in Normandy, France, including one box plant in Saint Amand, one box plant in Mortagne and one sheet plant in Cabourg; one box plant in Ovar, Portugal; and one box plant in Bilbao, Spain.

According to a news release announcing the negotiations, both parties expect to enter into a definitive share purchase agreement and expect the sale to close by the end of the second quarter of this year.

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“Finding the right buyer for these five facilities has been a top priority for our team since the completion of the acquisition of DS Smith, and I'm pleased that we have found one in Palm,” IP Chairman and CEO Andy Silvernail says. “We are grateful for the many contributions the team members at these five plants have made to the company and know they will continue to be successful and deliver value with their new owners.”

The sale of these box plants was agreed to with the European Commission as a concession of IP’s acquisition of London-based packaging company DS Smith.

Late last year, the European Commission said the transaction, as initially notified, would have reduced competition in the markets for manufacturing and supplying corrugated sheets in the north and west of Portugal, heavy-duty corrugated sheets in northeast Spain and corrugated cases in northwest France.

IP, based in Memphis, Tennessee, offered its concessions Dec. 20, 2024, with the European Commission approving the terms this January, and the IP-DS Smith merger, worth an estimated $7.2 billion, officially took effect Jan. 31.

The conclusion of IP’s divestment in Europe is subject to the European Commission’s approval of the proposed purchaser, Palm Group.

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The German paper company is divided into Paierfabrik Palm, its mill group that includes five paper mills; Palm Packaging Group, which has 29 corrugated box plants; and Palm Recycling, which includes two recycling facilities and handles the purchasing of Palm’s raw materials for its 100 percent recycled papers.

As a result of the sale, IP will have satisfied all its obligations toward the European Commission in connection with its acquisition of DS Smith.