signed a definitive agreement to sell its Brazilian coated papers business to
for $415 million, subject to certain postclosing adjustments.
The business includes a coated paper mill and lumber mill in Arapoti, Parana State, Brazil, as well as 124,000 acres of forestland in Parana. The transaction is expected to close in the third quarter of 2006, subject to customary closing conditions.
The transaction is part of International Paper's previously announced transformation plan to focus on uncoated papers and industrial and consumer packaging globally. Including this transaction, expected proceeds from transformation-related divestitures announced to date are $9.7 billion.
"The business and, more importantly, its employees have been an important part of International Paper in Brazil, and I am confident they will be an excellent addition to Stora Enso," said John Faraci, IP chairman and chief executive. "International Paper's ongoing operations in Brazil remain an important base for the company, and the region remains an area of growth for us as we explore opportunities to strengthen our uncoated papers and packaging businesses there."
The Brazilian coated papers business had sales of $230 million in 2005. It produces 200,000 metric tonnes of coated paper for catalog, magazine and retail insert markets, and 83 million board feet of lumber each year. Included among the 50,000 hectares of forestlands are 25,000 hectares of pine plantation and 5,000 hectares of eucalyptus plantation. The business employs more than 700 people.