International Paper has agreed to sell its Brazilian corrugated packaging business to local packaging company Klabin.

Under the terms of the agreement, Klabin will pay BRL280m ($64m) at closing as consideration. International Paper is also entitled to receive an additional BRL50m ($9.7m) a year after closing, subject to certain adjustments.

The divested portfolio includes three containerboard mills and four box plants.

However, International Paper will retain its Papers and Forestry businesses in Brazil.

The deal is expected to close in the second half of this year, subject to certain closing conditions and regulatory approvals.

Headquartered in the US state of Tennessee, International Paper specialises in producing renewable fibre-based packaging, pulp and paper products.

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The company has manufacturing units in North America, Latin America, Europe, North Africa and Russia.

Earlier this month, International Paper announced its Covid-19 response as the US struggles to contain the spread of the coronavirus.

As of 30 March 2020, more than 143,000 people in the US are infected by the disease.

The company noted that it will continue to operate its mills and converting plants as forest products are considered as an ‘essential industry’ in the country.

International Paper also said that will be implementing all necessary measures, such as social distancing and site cleaning among others, to ensure safety of its workers.

Overall, the company employs more than 50,000 people. Last year, it registered net sales of $22bn.