International Paper APPM parent IP in pact with West Coast Paper Mills to sell its controlling stake in Indian unit

The transaction is expected to be completed by the end of the year subject to customary closing conditions, the company said in the filing.

May 30, 2019 10:05 IST India Infoline News Service

International Paper Co. it has entered into an agreement to sell its controlling interest in its India-based paper business, International Paper APPM Ltd, to West Coast Paper Mills Ltd. The company made an announcement on Wednesday after market hours.

The transaction is expected to be completed by the end of the year subject to customary closing conditions, the company said in the filing.

International Paper currently owns ~30 million shares or 75% of the company.

"As part of our strategic assessment of the IP portfolio, we have decided to exit our position in IP APPM," Mark Sutton, International Paper chairman and CEO, said in a release. "This decision is a reflection of our continued focus on growing our global packaging and cellulose fibers businesses. Our paper business continues to perform well in India and we wish the team there the very best in the future."

West Coast Paper Mills Limited will launch a tender offer to acquire up to all of International Paper APPM Limited shares owned by public shareholders, which represents 25% of outstanding shares.

The closing of International Paper’s asset sale will occur following the completion of the tender offer and antitrust clearance.

The deal is expected to be completed by the end of the year subject to satisfaction of customary closing conditions, including obtaining required governmental approvals and West Coast Paper Mills Limited's launch of a tender offer, the company said.

Stock view: 
International Paper APPM Ltd is currently trading at Rs417.75, down by Rs11.6 or 2.7% from its previous closing of Rs429.35 on the BSE.

West Coast Paper Mills Ltd is currently trading at Rs288.20, up by Rs25.85 or 9.85% from its previous closing of Rs262.35 on the BSE.

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