International Paper Initiates Exclusive Sale Negotiations for Five European Facilities to Meet Regulatory Requirements
International Paper Engages in Exclusive Negotiations for European Plant Divestiture
International Paper, a leader in sustainable packaging solutions, has taken a significant step by entering exclusive negotiations to sell five of its corrugated box facilities in Europe. This move comes as part of their commitment to satisfy regulatory conditions linked to their recent acquisition of DS Smith Plc.
Details of the Transaction
The five plants under consideration include three located in Normandy, France (a box plant in Saint-Amand, another in Mortagne, and a sheet plant in Cabourg), as well as one box facility in Ovar, Portugal, and one more in Bilbao, Spain. The negotiations have commenced following an irrevocable offer from the PALM Group, based in Germany.
International Paper anticipates that after completing the necessary consultations and employee information processes mandated in France, they will proceed towards a definitive share purchase agreement with PALM. The anticipated closing of the deal is projected to occur by the end of the second quarter of 2025.
Leadership Insight
Andy Silvernail, Chairman and CEO of International Paper, highlighted the importance of finding a suitable buyer for these plants after the DS Smith acquisition. He expressed his satisfaction in securing PALM as the buyer, recognizing the valuable contributions of the employees at these facilities, and expressed confidence in their continued success under new ownership.
Regulatory Context
The divestiture aligns with commitments made to the European Commission during the acquisition of DS Smith, as detailed in a publication on January 24, 2025. The completion of the plant sale, however, is contingent upon the European Commission’s approval of the proposed buyer. Successfully meeting these regulatory obligations marks a significant achievement for International Paper in their strategic efforts.
About International Paper
Headquartered in Memphis, Tennessee, International Paper operates in over 30 countries, employing more than 65,000 individuals globally. The company reported net sales of $18.6 billion in 2024. The acquisition of DS Smith has positioned International Paper as a stronger player in the North American and EMEA regions, focused on sustainable practices in packaging solutions.
About PALM Group
PALM Group is a significant player in the European packaging market, operating from its headquarters in Aalen, Germany. The family-owned business specializes in producing containerboard, graphic paper, and corrugated packaging. With 5 paper mills and 29 corrugated plants, the company has generated a turnover of €2 billion in 2024 and is known for its commitment to high product quality and sustainable production processes.
Advisors and Next Steps
BofA Securities has been appointed as the exclusive financial advisor to International Paper during this transaction. Legal guidance is being provided by Skadden, Arps, Slate, Meagher & Flom LLP. Both companies are now taking necessary steps to ensure that the transaction proceeds smoothly, pending regulatory approval.
This divestiture not only helps International Paper comply with European regulatory stipulations but also reflects the ongoing trend of consolidation in the competitive packaging industry as companies adapt to market demands and regulatory landscapes.