AIP Acquires International Paper's Global Cellulose Fibers Business for $1.5 Billion

AIP, LLC agreed to acquire International Paper Company's Global Cellulose Fibers Business for $1.5 billion. The transaction is subject to regulatory approval and is expected to be completed in Q4 2025. If not completed by February 20, 2026, either party may terminate the agreement. BofA Securities and Davis Polk & Wardwell LLP advised AIP, while Morgan Stanley and Debevoise & Plimpton LLP advised International Paper Company.

International Paper (IP), a global leader in sustainable packaging solutions, has announced a strategic shift with the sale of its Global Cellulose Fibers (GCF) business to American Industrial Partners (AIP). The transaction, valued at $1.5 billion, is subject to regulatory approval and is expected to be completed by the end of the year [1].

The GCF business, which generates $2.8 billion in revenue annually and employs 3,300 people globally, produces safe and high-quality pulp for a variety of applications, including personal care products and construction materials [1]. The sale is part of International Paper's ongoing transformation journey to achieve a more advantageous cost position and deliver superior customer experiences [1].

"GCF is a strong business, and I'm pleased to see it transitioning to AIP," said Andy Silvernail, CEO of International Paper. "Over the past few months, GCF has done the hard work of aligning resources with its most strategic customers and creating a simplified and focused portfolio" [1].

AIP, a partner in the transaction, is focused on investing in and growing industrial businesses. Rick Hoffman, a partner at AIP, expressed his excitement about the acquisition, stating, "GCF is well-positioned for future growth, supported by its large and sustainable wood basket, durable end markets, industry-leading quality and innovation, long-term customer relationships, deeply knowledgeable employees, and well-invested facilities" [1].

The transaction includes the issuance of preferred stock with an aggregate initial liquidation preference of $190 million. Morgan Stanley & Co. LLC and Debevoise & Plimpton LLP acted as financial and legal advisors to International Paper, respectively, while BofA Securities and Davis Polk & Wardwell LLP advised AIP [1].

In addition to the GCF sale, International Paper has announced strategic changes to its packaging solutions business in North America. This includes a $250 million investment in the Riverdale Mill in Selma, Ala., to convert its #16 machine to produce containerboard. The company will also permanently close the Savannah, Ga., containerboard mill, the Savannah, Ga., packaging facility, and Riceboro containerboard mill and Timber and Lumber, impacting approximately 1,100 positions [1]. The Riverdale conversion is expected to be completed by the third quarter of 2026, while the Riceboro and Savannah mills will shut down in phases by the end of September 2025 [1].

These changes are part of International Paper's broader strategy to focus on geographies, customers, and products where it can create the most value. The company is committed to supporting affected employees through this transition, offering severance packages and outplacement assistance [1].

References:
[1] https://www.prnewswire.com/news-releases/international-paper-announces-strategic-changes-302535325.html