International Paper today announced that it has completed the acquisition of a 75 percent stake in Andhra Pradesh Paper Mills (APPM). International Paper purchased 53.5 percent of the APPM shares from Mr. L.N. Bangur and related family members and affiliates for approximately US$226 million in cash. These sellers have also entered into a covenant not to compete, for which they received a cash payment of US$57 million. In addition, International Paper acquired an additional 21.5 percent of APPM shares in a public tender offer completed on October 8, 2011, for approximately US$105 million in cash. Paul Brown, president, IP India, will become executive chairman of the APPM Board of Directors, effective today.
"As we complete this phase of the process and move into majority ownership, International Paper is well-positioned to help serve a rapidly growing Indian market," said John Faraci, International Paper Chairman and Chief Executive Officer. "We look forward to building on Andhra Paper's tradition of excellence while introducing the global best practices that make International Paper an industry leader. We are delighted to welcome these new employees to International Paper."
APPM is one of the leading integrated paper manufacturers in India, and operates two mills with a combined annual capacity of 250,000 tonnes of uncoated freesheet paper. The existing management team and 2,500 employees of APPM will continue to operate the business, supplemented by additional International Paper leadership and professional and technical resources.
Note: US$ monetary amounts are based on an average Indian Rupee to U.S. Dollar exchange rate of INR 48.25 per US$.