IP to sell Temple-Inland
Less than a year after purchasing it in a hostile takeover, International Paper (IP) has agreed to sell its Temple-Inland Building Products division to Georgia-Pacific for $750 million in cash, subject to certain pre-and post-closing adjustments. The assets to be sold include16 manufacturing facilities: five solid wood mills, four particleboard plants, two medium-density fiberboard plants, one fiberboard plant and four gypsum wallboard plants.
Temple-Inland Building Products facilities are located across eight states, primarily in the southeastern and eastern portions of the United States, with access to five of the top 12 housing markets, according to the announcement.
John Faraci, IP’s chairman and CEO, described the division as “not core to IP’s strategy.” He added: "I am pleased to have reached a deal that recognizes the strength of the business and provides excellent value for IP shareowners."
The transaction is expected to be completed in the first quarter of 2013, subject to various closing conditions, including obtaining required governmental approvals.
IP acquired Temple Inland in February 2012 for approximately $4.5 billion. The deal, which started as an unsolicited bid, became a hostile takeover and was then delayed by government regulators who placed certain conditions on the purchase. IP and Temple-Inland agreed to sell three containerboard facilities to satisfy competitive concerns of the Department of Justice’s Antitrust Division, which was concerned that consumers would end up paying more for containerboard and corrugated boxes.
Headquartered in Memphis, Tenn., International Paper is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the company's North American distribution company. Paper net sales for 2011 were $26 billion. Temple-Inland had 2011 net sales of $4 billion.