International Paper Agrees to Sell Beverage Packaging, Arizona Chemical Businesses
Memphis, TN - International Paper has signed two definitive agreements related to the sales of its beverage packaging and Arizona Chemical businesses for combined proceeds of approximately $985M. The transactions are both subject to certain adjustments and conditions at closing, including receipt of regulatory approvals. The agreements are part of International Paper's transformation plan. Proceeds from all transformation-related divestitures announced to date, including beverage packaging and Arizona Chemical, total approximately $11B.
"These agreements bring us close to completing the divestitures planned as part of our transformation, and I'm extremely pleased with the progress we've made in 2006 to become a more focused, more profitable company," said John Faraci, International Paper chairman and chief executive. "Exiting these businesses is the right step for International Paper and our shareowners, but I don't want to lose sight of the contribution the businesses and their employees have made to this company. They have a legacy of strong leadership, talent and commitment, and I know they'll continue to succeed."
Beverage Packaging
International Paper has agreed to sell its beverage packaging business to Carter Holt Harvey, Ltd., for approximately $500M, subject to certain adjustments. The transaction is expected to close in the first quarter of 2007, subject to various closing conditions, including receipt of regulatory approvals and other customary conditions.
The sale of the beverage packaging business to Carter Holt Harvey will allow a very profitable business to continue growing. "This is an exciting opportunity for our employees, our customers and our communities to continue to build on the success we've achieved. We're proud of our history and look forward to taking the business to new heights with our new owners," said Scott Murchison, vice president and general manager of the beverage packaging business.
The beverage packaging business includes gable-top beverage converting facilities in Massachusetts, Michigan, North Carolina, Florida, California, and Ontario and Quebec, Canada; the Evergreen Packaging manufacturing facility in Iowa, and the Pine Bluff mill in Arkansas. The business also has wholly owned subsidiaries in China, South Korea and Taiwan, and joint ventures in Latin America, Israel, and Saudi Arabia. The business employs approximately 3,000 employees and produces more than 680,000 tons annually of high-quality packaging for juice, dairy and other products, and coated groundwood paper. The business had net sales of approximately $860M in 2005.
Arizona Chemical International Paper has agreed to sell its Arizona Chemical business to Rhône Capital III L.P. for approximately $485M, subject to certain adjustments. As part of the transaction, International Paper will acquire a minority interest of approximately 10 percent in the acquisition vehicle to be formed by Rhône Capital. The transaction is expected to close in the first quarter of 2007, subject to certain customary closing conditions.
"We are excited about the sale of Arizona Chemical to Rhône Capital. We look forward to the opportunity to work with their leadership team to further grow our business as a global leader in the pine chemical industry," said Gerald Marterer, vice president, Arizona Chemical. "Arizona Chemical is an excellent team of talented people with a well respected brand and an outstanding customer base worldwide. Our business has been a solid contributor to International Paper, and we expect to continue to thrive under new ownership."
SOURCE: International Paper