International Paper is planning to split the Group into two independent, listed companies. In addition to the North American business, the packaging business in Europe, the Middle East and Africa is to be floated on the capital market as an independent company.
International Paper has announced that it will separate its business into two independent, publicly traded companies. In future, International Paper will bundle the North American business, while the EMEA packaging business will be spun off as an independent company. According to the company, the aim of the separation is to strengthen the regional focus and drive forward the operational and financial development of both units in a targeted manner.
In the course of integrating the former DS Smith activities, the Group has identified significant regional effects over the past twelve months, explained International Paper. The different market conditions in North America and the EMEA region mean that a clear organisational separation now makes sense.
Focus on North America
The future International Paper will focus entirely on packaging solutions in North America. The business will include International Paper's existing activities as well as the DS Smith assets integrated in the region. The company intends to continue its strategy of optimising the production network, targeting investments and further increasing operational efficiency.
Following the spin-off, International Paper plans to invest more in organic growth, productivity and selected acquisitions. Group management will remain unchanged: Andy Silvernail will continue to serve as Chairman and Chief Executive Officer, Lance Loeffler as Chief Financial Officer and Tom Hamic as President Packaging Solutions North America.
Independent EMEA packaging company
The spun-off EMEA business will operate as an independent packaging company in around 30 countries in Europe, the Middle East and Africa. It is based on International Paper's previous Packaging Solutions activities in the region, which are managed operationally under the DS Smith brand. The focus will be on sustainable packaging solutions, innovation and further optimisation of cost structures.
International Paper intends to continue to support the EMEA business financially until the spin-off in order to improve operational performance. Tim Nicholls, who is currently responsible for the EMEA business, will be appointed Chief Executive Officer of the new company. David Robbie is to take over as Chairman of the Board of Directors.
Spin-off planned within 12 to 15 months
The spin-off is planned as a spin-off to the shareholders of International Paper, whereby the Group initially intends to retain a significant stake. The new EMEA company will be listed on both the London Stock Exchange and the New York Stock Exchange. The transaction is expected to be completed within 12 to 15 months, subject to regulatory approvals and the approval of the Board of Directors.
Further details on the capital structure and the expanded management organisation will be announced at a later date.
Source: International Paper
