Paper and packaging company International Paper Co. (IP), Thursday said it has agreed to sell its Temple-Inland building products unit to Georgia-Pacific LLC for $750 million in cash. The move is in line with the company's strategy to focus on its paper and packaging business, and dispose off non-core units.
International Paper took over the Temple-Inland building products unit when it bought smaller rival Temple-Inland Inc. for $3.7 billion earlier this year.
Chief Executive John Faraci said, "While not core to IP's strategy, Temple-Inland Building Products is an industry leader. I am pleased to have reached a deal that recognizes the strength of the business and provides excellent value for IP shareowners."
The deal will give Georgia-Pacific 16 manufacturing facilities, including five solid wood mills, four particleboard plants, two medium-density fiberboard plants, one fiberboard plant and four gypsum wallboard plants. The facilities are located primarily in the southeastern and eastern regions of the US.
Memphis, Tennessee-based International Paper expects to close the deal in the first-quarter of 2013. The company plans to use proceeds from the sale to reduce its debt.
IP is currently trading at $37.79, up $0.41 or 1.10%, on the NYSE.
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