Memphis, Tenn.-based International Paper announced Feb. 13 the merger of its Metal Acquisition Inc. subsidiary with Austin, Texas-based Temple-Inland, a move that completes the purchase of Temple-Inland, said Peter Heist, International Paper’s west area vice president for industrial packaging.
Heist said the purchase reaffirms International Paper’s dedication to meeting its produce customers’ supply chain needs with sustainable solutions like its ClimaSeries family of products.
“By combining the very best of both International Paper and Temple-Inland, International Paper is now better positioned to supply the produce industry and provide produce customers with quality products, reliable services, and superior value,” Heist said.
In a news release, International Paper chairman and chief executive officer John Faraci said the integration of the two businesses creates an even stronger company with benefits for customers, employees and shareholders.
“The combination of International Paper and Temple-Inland strengthens our North American packaging business and enhances our ability to generate cash flow while maintaining our strong balance sheet,” Faraci said.
Including the assumption of approximately $700 million in Temple-Inland debt, International Paper paid about $4.5 billion for the company.
Before the deal could go through, the U.S. Department of Justice required International Paper and Temple-Inland to sell a combined three containerboard mills.
According to a Feb. 10 news release from the department, “the merger, as originally proposed, would have substantially lessened competition in the production and sale of containerboard.”
The department’s antitrust division filed a civil antitrust lawsuit Feb. 10 in U.S. District Court in Washington, D.C., to block the proposed transaction if the companies didn’t agree to sell the mills.
“Corrugated boxes made from containerboard are used to ship more than 90% of all goods nationwide,” Sharis Pozen, acting assistant attorney general in charge of the department’s antitrust division, said in the release. “With the mill divestitures, the transaction can proceed and American consumers and businesses across the country can be assured that competition is preserved in this important industry that is vital to the U.S. economy.”