International Paper announced that it has reached two agreements to sell three U.S containerboard mills in order to satisfy the company's obligations in its February 2012 settlement agreement with the U.S. Department of Justice. Under the terms of the DOJ settlement agreement, entered into in connection with the company's acquisition of Temple-Inland, International Paper agreed to divest the following mills:
• the former Temple-Inland mill in Ontario, CA
• the former Temple-Inland mill in New Johnsonville, TN
• the International Paper mill in Oxnard (Hueneme), CA
After conducting a robust auction process, International Paper has entered into agreements for the sale of the New Johnsonville mill to Hood Companies, Inc., and for the sale of the Ontario and Hueneme mills to New-Indy Containerboard LLC, a newly formed joint venture of The Kraft Group, LLC and Schwarz Partners, LP.
"We are pleased to have reached these agreements within the timeline established in our settlement with the DOJ," said Chairman and CEO John Faraci. "The purchasers are experienced operators in the paper, forest products and packaging industries, and we look forward to working with them to close these transactions in a timely manner."
The Kraft Group and Schwarz Partners said in a joint statement today, "We have been working together in the paper and packaging industry for decades and we have never been more optimistic about the direction of the industry than we are currently. This investment represents a generational commitment by both families to the industry."
Hood Companies Inc. said in a statement, "The mill represents a key strategic growth platform within Hood's holdings. We view the New Johnsonville mill as an exceptional asset with an outstanding management team and employee group. We look forward to the long term opportunities that this acquisition creates for the New Johnsonville employees and Hood Companies."
Each divestiture is subject to certain closing conditions, including DOJ approval, and must be closed within the time periods prescribed by the DOJ settlement agreement.