Deal finally reached for International Paper to acquire Temple-Inland

MEMPHIS, TENN.

September 6, 2011 6:47am     

•  IP will pay $4.3 Billion for box maker

•  Includes Central Valley plant

International Paper (NYSE: IP) of Memphis, Tenn., has finally offered enough money for the board of Temple-Inland Inc. (NYSE: TIN) of Austin, Texas, to agree to have their firm acquired.

How much? $32 per share or roughly $4.3 billion, including assumption of $600 million in Temple-Inland's year end debt, IP says Tuesday.

Temple-Inland operates a corrugated box plant in Tracy in the Central Valley among its nationwide holdings.

The combination has been approved by the boards of both companies.

The transaction is expected to be accretive to International Paper's shareholders in year one after closing. It is expected to close in the first quarter of 2012.

"The strategic benefits of this combination are clear and we are pleased to be able to move forward on terms that are financially attractive for both sets of shareholders,” says International Paper Chairman and CEO John Faraci.

A hint of what may be in store for employees of both companies comes in the press release:

“The combination is expected to yield synergies of approximately $300 million annually within 24 months of closing, derived primarily from the areas of operations, freight, logistics, selling expense and overhead.

“The companies have a shared focus on low-cost mills, complementary converting systems and high levels of box integration -- Temple-Inland's products and manufacturing facilities are an excellent strategic fit with International Paper's current offerings and facilities,” it says.

In addition to the approval of Temple-Inland's stockholders, the transaction is subject to customary closing conditions, including antitrust approvals.

Evercore Partners and UBS Investment Bank served as financial advisors to International Paper and Goldman, Sachs & Co. served as financial advisor to Temple-Inland. Debevoise & Plimpton LLP served as International Paper's legal counsel and Temple-Inland was advised by Wachtell, Lipton, Rosen & Katz.

http://www.centralvalleybusinesstimes.com/stories/001/?ID=19279