IP's corrugated packaging business in Asia has 18 plants and approximately 3,000 employees.
To be completed in the next few months
Under the terms of the transaction, IP will receive a total of approximately $150m, subject to post-closing adjustments and other payments, including the buyer's assumption of the liability for loans of approximately $50m to be paid to International Paper within six months of closing of the sale.
The transaction is expected to be completed in the next few months, subject to satisfaction of closing conditions, including obtaining required governmental approvals.
IP announced its Q4 2015 results last month, where it achieved a return on invested capital of 11%, free cash flow at $1.8bn and earnings per share of $3.65 driven by strong results in its North American Industrial Packaging business and Ilim joint venture in Russia.
Riegelwood conversion
Mark Sutton, chairman/CEO, IP, said the firm completed the sale of its 55% stake in Sun JV (joint venture) in China at the beginning of the fourth quarter. It received $25m cash and eliminated approximately $400m of consolidated debt.
“We have a robust list of focus items for 2016. At the top of that list and for very good reason is continuing to improve our North American Industrial Packaging system,” said Sutton.
“The Riegelwood conversion has begun with the objective of having the mill up and running in May and fully ramped up by the fourth quarter.
“Additionally, we are executing our plan to grow our cup business at our recently expanded Canton, Ohio cup facility. This will enable us to take care of our key customers' growing needs in this important segment as consumers drive the shift – continue to drive the shift from foam to fiber-based packaging.
"Another focus item for us in 2016 is to optimize our North American paper portfolio by aligning with the most attractive customers and the opportunities to deliver a strong value proposition to those customers.
“We're also working toward the sale of our Asia box business as we announced last October.”