International Paper (IP) has announced the completed acquisition of Temple-Inland, which will now become a wholly owned subsidiary of IP. Under the terms of the transaction, each issued and outstanding share of Temple-Inland common stock will fetch $32.00 in cash, including the assumption of approximately $700 million in Temple-Inland net debt. The total transaction value is approximately $4.5 billion.
The deal, which started as an unsolicited bid, became a hostile takeover and was then delayed by government regulators, comes with certain conditions. IP and Temple-Inland must agree to sell three containerboard facilities, in Central California, Tennessee and possibly Kentucky, to satisfy competitive concerns of the Department of Justice’s (DOJ) Antitrust Division.
Without these divestitures, consumers would pay more for containerboard and corrugated boxes, the DOJ said in a prepared statement.
“Corrugated boxes made from containerboard are used to ship more than 90% of all goods nationwide,” said Sharis Pozen, acting Assistant Attorney General in charge of the DOJ’s Antitrust Division. “With the mill divestitures, the transaction can proceed, and American consumers and businesses across the country can be assured that competition is preserved in this important industry that is vital to the U.S. economy.”
International Paper is a New York corporation headquartered in Memphis, Tenn. IP owns and operates 12 containerboard mills and 133 box plants that convert containerboard into corrugated boxes in the United States. In 2010, IP reported revenues of approximately $25.2 billion, with its North American Industrial Packaging Group, which produces containerboard and corrugated products, accounting for $8.4 billion.
Temple-Inland is a Delaware corporation headquartered in Austin, Texas. Temple-Inland owns and operates seven containerboard mills and 53 box plants in the United States. In 2010, Temple-Inland reported revenues of approximately $3.8 billion, with its corrugated-packing business accounting for approximately $3.2 billion. Temple-Inland also produces lumber, gypsum board, fiberboard and other building materials.