International Paper Completes Acquisition of Majority Stake in Andhra Pradesh Paper Mills
International Paper today announced that it has completed the acquisition of a 75 percent stake in Andhra Pradesh Paper Mills. International Paper purchased 53.5 percent of the APPM shares from Mr. L.N. Bangur and related family members and affiliates for approximately US$226 million in cash. These sellers have also entered into a covenant not to compete, for which they received a cash payment of US$57 million. In addition, International Paper acquired an additional 21.5 percent of APPM shares in a public tender offer completed on October 8, 2011, for approximately US$105 million in cash. Paul Brown, president, IP India, will become executive chairman of the APPM Board of Directors, effective today.
"As we complete this phase of the process and move into majority ownership, International Paper is well-positioned to help serve a rapidly growing Indian market," said John Faraci, International Paper Chairman and Chief Executive Officer. "We look forward to building on Andhra Paper's tradition of excellence while introducing the global best practices that make International Paper an industry leader. We are delighted to welcome these new employees to International Paper."
APPM is one of the leading integrated paper manufacturers in India, and operates two mills with a combined annual capacity of 250,000 tonnes of uncoated freesheet paper. The existing management team and 2,500 employees of APPM will continue to operate the business, supplemented by additional International Paper leadership and professional and technical resources.
Note: US$ monetary amounts are based on an average Indian Rupee to U.S. Dollar exchange rate of INR 48.25 per US$.
About Andhra Pradesh Paper Mills
The Andhra Pradesh Paper Mills Limited (APPM) is a leading manufacturer of pulp and paper products and caters to both the domestic and foreign markets. With two manufacturing units in Andhra Pradesh and a total paper production capacity of 250,000 metric tonnes per annum, APPM produces writing and printing and copier papers. With sales of approximately US$160 million, focused social and community programs backed up with its own pioneering work in raw material generation through social farm forestry and a very strong strategic growth focus, APPM is becoming a driving force in the green paper manufacturing arena in the world economy. For more information on APPM, please visit andhrapaper.com
About International Paper
International Paper (NYSE: IP) is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the company's North American distribution company. Headquartered in Memphis, Tenn., the company employs about 59,500 people in more than 24 countries and serves customers worldwide. 2010 net sales were more than $25 billion. For more information about International Paper, its products and stewardship efforts, visit internationalpaper.com.
This press release contains forward-looking statements. These statements reflect management's current views and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. Factors which could cause actual results to differ relate to: (i) the failure to realize synergies and cost-savings from the transaction or delay in realization thereof; (ii) industry conditions, including but not limited to changes in the cost or availability of raw materials and energy, transportation costs, the company's product mix, demand and pricing for its products; (iii) supply and demand conditions and other economic factors affecting India, Asia, Eastern Europe, and Russia, including but not limited to changes in currency exchange rates and natural disasters; and (iv) unanticipated expenditures related to the cost of compliance with environmental and other governmental regulations and to actual or potential litigation. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. These and other factors that could cause or contribute to actual results differing materially from such forward looking statements are discussed in greater detail in the company's Securities and Exchange Commission filings.