MEMPHIS, TN — International Paper, a global paper and packaging company, on Aug. 4 announced that it has completed the purchase of the assets of Weyerhaeuser's Containerboard, Packaging and Recycling business for approximately $6 billion in cash, subject to post-closing adjustments.
Because the transaction is a purchase of assets rather than of stock, International Paper will realize a tax benefit that has an estimated net present value of approximately $1.4 billion.
“This acquisition aligns well with our strategy to deliver improved bottom line results and further strengthen one of our company’s platform businesses,” said Chairman and CEO John Faraci. “With a full management team already in place, we are prepared to deliver merger benefits quickly, while continuing to closely manage our capacity with our customers’ demand.”
Carol Roberts, senior vice president of International Paper’s packaging business, said she sees considerable upside potential in the acquisition. “Weyerhaeuser has low-cost, well-run assets that complement our existing mill and converting system and offer significant synergies,” she said.
International Paper has identified profit improvement opportunities of about $400 million annually from the acquisition, as a result of reducing duplicate overhead costs, integrating manufacturing operations, optimizing product mix, and improving operational and supply chain efficiencies. The company expects to achieve at least 40% of the improvement within 12 months of completing the transaction.
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