International Paper Co (NYSE:IP) pointed higher ahead on Tuesday’s open after it unveiled a deal to divest its consumer packing business into Graphic Packaging via a transaction worth US$1.8bn.
IP will receive US$660mln cash proceeds and will retain a 20.5% stake in Graphic Packaging (worth US$1.14bn). The deal is expected to close early next year.
"After evaluating a range of strategic options, we believe this transaction represents excellent value for IP's shareholders," said Mark Sutton, International Paper chief executive.
"Investing in Graphic Packaging gives IP the opportunity to benefit from a much stronger value-creation consumer packaging platform, while allowing us to remain focused on growing value in our core businesses.
“Our North America Consumer Packaging business has a talented team, very good assets and great customers, and I am confident of the results the combined business will achieve."
In New York, IP shares advanced 0.86% to trade at US$58.75.