International Paper (NYSE: IP) and Brazilian corrugated packaging producer Jari Celulose, Embalagens e Papel S/A, a Grupo Orsa company, have entered into an agreement to form a joint venture which will support IP's strategy of growing its global packaging presence and better serving its global customer base. Jari's industrial packaging assets, including three containerboard mills and four box plants, will be separated from its pulp and forestry businesses and transferred to a newly formed company in which IP will hold a 75 percent stake. IP's investment in the joint venture will be BRL 952 million, or approximately $470 million at today's exchange rate.
"This partnership fits well with International Paper's strategy to globally grow our corrugated packaging business in strategic regions of the world," said John Faraci, Chairman and Chief Executive Officer. "We are excited about Brazil's growing market and this investment provides us with an attractive position with a strong return on investment."
With an agreement now in place, the companies expect to finalize the transaction early in the first quarter of 2013, subject to various closing conditions and governmental approvals.
The company will discuss the agreement, during its third quarter earnings webcast on Thursday, October 25th.
SOURCE International Paper