The American paper group International Paper wants to divest its printing paper segment by the end of the third quarter of 2021. This division, which will account for 19% of the group's sales by 2019, produces office papers, digital printing papers, offset papers and specialty papers. It includes the Saillat plant in Haute-Vienne, France. Following the demerger, the new company will become an independent, listed company.
"International Paper will be a company more focused on corrugated packaging and absorbent cellulose fibres for attractive segments, well positioned to increase profits and cash flow", says in a press release Mark Sutton, President and CEO of the $22 billion revenue group in 2019 .
Plus $350 to $400 million in earnings by 2024
International Paper targets in particular the industrial packaging market in North America, Europe, the Middle East and Africa and intends to improve the profitability of its Global Cellulose Fibers business. With this transaction, the papermaker listed on the New York Stock Exchange expects additional annual profits of USD 350 to 400 million by the end of 2023, including USD 50 to 100 million in annual growth and USD 300 million through structural cost reductions.
After the demerger, International Paper is expected to have sales of $17 billion, 85% of which will be generated in industrial packaging and 15% in cellulosic fibres on the international market. The group will operate 20 paperboard mills with an annual capacity of 14.5 million tonnes, eight pulp mills with an annual capacity of 3.2 million metric tonnes and 220 converting facilities.
Nine mills in the new printing paper company
The former Printing Paper Division will have approximately $4 billion in sales, eight mills with an annual capacity of 2.9 million metric tons of uncoated paper and one mill with 400?000 metric tons of coated paper.
Three are in the EMEA zone, one in France at the Saillat plant in Haute-Vienne, one in Russia and one in Poland, three are in the United States and three in Brazil," says International Paper.
The new company will be headed by Jean-Michel Ribiéras, currently vice-president of the industrial packaging department. John V. Sims, currently Vice President of Corporate Development, will serve as Chief Financial Officer.
The transaction will be carried out through the distribution of shares in the new company to International Paper shareholders. International Paper will retain up to 19.99% of these shares at the time of separation, with the intention of monetizing and providing additional proceeds to International Paper.
The completion of the demerger is subject to the usual regulatory conditions.
