US-based International Paper has signed an agreement to dispose of its controlling stake in India-based paper business International Paper APPM to West Coast Paper Mills (WCPM).
The company has made this decision in a bid to focus on growing its global packaging and cellulose fibres businesses. International Paper currently owns a 75% interest in the Indian business.
International Paper chairman and CEO Mark Sutton said: “As part of our strategic assessment of the IP portfolio, we have decided to exit our position in IP APPM.
“This decision is a reflection of our continued focus on growing our global packaging and cellulose fibres businesses. Our paper business continues to perform well in India and we wish the team there the very best in the future.”
The deal is currently subject to satisfaction of customary closing conditions, including required governmental approvals, and WCPM’s tender offer launch.
The tender offer is to acquire the remaining 25% interest owned by public shareholders in APPM.
WCPM will also acquire between 51% and 60% of the outstanding APPM shares for Rs275 ($3.94) from International Paper depending on the results of the tender offer.
The company expects to close the deal by the end of this year, which will occur upon completion of the tender offer and receipt of antitrust clearance.
Following the completion of transaction, WCPM will oversee the operations of APPM with International Paper acting as a passive investor until IP completes the sale of its remaining stake in APPM.
International Paper produces renewable fibre-based packaging, pulp and paper products. It has a manufacturing footprint in North America, Latin America, Europe, North Africa, India, and Russia.
The company offers corrugated packaging products to protect and promote goods, along with pulp and papers for other applications.