The stockholders of US-based Temple Inland have approved the company’s merger with International Paper (IP) with more than 98% of the votes in favour of the acquisition.

According to reports, IP has agreed to pay about $4.3bn to acquire Temple-Inland, a figure which includes a $32 a share price and the assumption of $600m in debt.

International Paper CFO Tim Nicholls, in a Memphis Business Journal interview on 27 October, said the acquisition would be good for Memphis in the long run, after Temple-Inland’s operations are integrated.

"We can’t do any significant planning until we go through the regulation process, but there are discussions about combining the operations," Nicholls said.

In a November conference call with analysts, International Paper CEO John Faraci said that acquiring Temple-Inland "significantly contributes to our ability to further take cost out of our important North American industrial packaging business."

Earlier on 6 September, Temple-Inland’s board agreed to IP’s $32 a share takeover bid after rejecting two earlier offers, about 5% higher than the initial bid.

Completion of the merger however is subject to other customary closing conditions, including the receipt of regulatory approval.

If the merger is completed, Temple-Inland will become a wholly owned subsidiary of IP and Temple-Inland’s leadership is not expected to be retained.

Headquartered in Memphis, Tennessee, IP has manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa, while Temple-Inland’s fully integrated corrugated packaging operation consists of 7 mills and 57 converting facilities.

The combined entity is expected to cover about 40% of the corrugated packaging materials market in North America against IP’s current 27%.

IP reported 2010 revenue of $25bn and Temple-Inland, the region’s third-largest corrugated packaging maker, posted $3.8bn revenue during the same period.