International Paper Gets Conditional Approval to Buy Temple
International Paper Co. (IP), the world’s largest pulp and paper maker, won conditional approval from U.S. antitrust regulators for its $3.7 billion takeover of Temple- Inland Inc.
International Paper will sell three containerboard mills to proceed with the takeover, the U.S. Department of Justice said today in a statement on its website.
The acquisition “as originally proposed, would have substantially lessened competition in the production and sale of containerboard, the type of paper used to make corrugated boxes, in the United States,” the DOJ said.
International Paper Chief Executive Officer John Faraci last year said the all-cash deal of $32 a share would boost International Paper’s share of the continent’s corrugated- packaging market to about 37 percent from 27 percent. Memphis, Tennessee-based International Paper last year raised its offer to win acceptance from Temple-Inland.
Analysts expected conditional approval.
The acquisition “would fundamentally alter the balance of power in favor of producers, and help ensure that cost-of- capital returns become routine,” Mark Connelly, a New York- based analyst at Credit Agricole Securities (USA) Inc., said Jan. 23 in a note to clients. “We expect very little price volatility going forward.”
International Paper fell less than one percent to $31.28 at 11:53 in New York trading.
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