PE firms explore deals for International Paper’s European packaging business, FT reports

PE Firms Explore Bids for International Paper’s European Packaging Unit

Private Equity Interest and Strategic Implications

Potential Bids and Valuation

Oct 15 (Reuters) - Private equity firms Lone Star and Atlas Holdings are exploring separate bids for International Paper's European packaging business, potentially valued at less than $6 billion, the Financial Times reported on Thursday, citing people familiar with the matter.

Shares of the paper and packaging producer were up about 7%.

Impact on International Paper’s Corporate Strategy

Scrapping the Spin-Off Plan

A sale would mean the scrapping of International Paper's plan, announced in January, to split into two publicly traded companies by spinning off the European packaging business.

Market Position and Recent Performance

International Paper, which accounts for roughly one-third of the North American corrugated packaging market, has been battling soft demand due to weak consumer spending and housing market.

Recent Acquisitions

Last year, the company completed a $7.2 billion buyout of London-based rival DS Smith.

Future Prospects for the European Unit

Planned Public Listings

It said in January that the new Europe, Middle East and Africa packaging company would consist of the combined operations that originated from DS Smith and International Paper in the region, and was expected to list on the London and New York stock exchanges.

Responses from Stakeholders

International Paper and Atlas Holdings did not immediately respond to Reuters requests for comment. Lone Star declined to comment.

Financial Performance and Restructuring

Recent Earnings and Forecasts

The company, in July, missed Wall Street expectations for second-quarter sales and trimmed the top end of its annual profit forecast while it restructured operations.

Reporting and Editorial Credits

(Reporting by Shania S Thomas in Bengaluru; Editing by Joyjeet Das and Sahal Muhammed)