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West Coast Paper Mills (WCPM) has entered into a share-purchase agreement to acquire about 51-60 per cent stake in NYSE-listed International Paper’s (IP) Indian unit, International Paper APPM Ltd.
The deal, which is pursuant to regulatory approvals and an open offer, would be for about ₹558-656 crore in cash.
The stake will be acquired from existing promoters — International Paper Investments (Luxembourg), SARL Luxembourg and IP International Holdings Inc, US. The deal is expected to be completed by the end of the year, WCPM said in a regulatory filing.
Open offer
WCPM will launch an open offer to acquire all of APPM’s shares held by the public, which amounts to 25 per cent of APPM’s outstanding shares.
Depending on the open offer, WCPM will acquire between 51-60 per cent of APPM’s shares at ₹275 per share from IP.
Following the closure of this transaction, WCPM will be responsible for the operations of APPM and IP will be a passive investor till it sells its remaining shares. Bank of America-Merrill Lynch was the adviser to IP on the deal. WCPM has appointed ICICI Securities as manager to the open offer.
“As part of our strategic assessment of the IP portfolio, we have decided to exit our position in IP APPM,” said Mark Sutton, the company’s Chairman and CEO.
“This decision is a reflection of our continued focus on growing our global packaging and cellulose fibres businesses,” he added.
IP APPM, incorporated on June 29, 1964, is into manufacturing and sale of pulp, paper and paper boards.
The company had posted a turnover of ₹1,441.92 crore for the financial year ended March 31, 2019, up from ₹1,285.09 crore recorded during the previous year-ago fiscal.
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