The spin-off is being planned to boost International Paper’s profitable growth in industrial packaging in North America and Europe, the Middle East and Africa.
December 7, 2020
International Paper (IP) has announced its plans to spin-off its printing papers segment to focus more on its industrial packaging segment.
A standalone and publicly traded company (SpinCo) will be formed due to the spin-off of IP’s printing papers segment. The deal will enable to create two streamlined companies for long-term success.
IP aims to boost profitable growth in industrial packaging in North America and Europe, the Middle East and Africa, in addition to enhancing its global cellulose fibres business. The company will continue its joint venture with Ilim Holdings in Russia.
The company intends to reduce its cost structure and accelerate earnings. International Paper will be a streamlined, more-agile organization and expects to generate an additional USD 350-400 million of annual earnings by the end of 2023, including USD 50-100 million in annual incremental earnings growth and USD 300 million in structural cost reductions. International Paper remains committed to its current capital allocation framework, which is the foundation for driving shareowner value.
SpinCo is expected to have talented teams, substantial scale, strong brands and low-cost assets to serve key geographies, including North America, Brazil and Europe. SpinCo’s anticipated capital structure is intended to allow strategic and operating flexibility and the potential to optimize the business.