One of the world?s biggest paper manufacturers and NYSE-listed International Paper has entered into agreement with the Kolkata-based LN Bangur group to purchase approximately 53.5% of the outstanding shares of Andhra Pradesh Paper Mills Limited (APPM) for approximately $257 million in cash. APPM is part of the LN Bangur group.
International Paper has also agreed to a $62 million non-compete payment to the sellers. The company will also launch a mandatory public tender offer to acquire upto an additional 21.5% of the outstanding shares of APPM for approximately $104 million in cash. International Paper anticipates acquiring up to 75% of APPM?s outstanding shares through these two transactions.
Once completed, the transaction will position International Paper as the first global paper and packaging company with a significant position in India?s fast growing economy, says a release. When contacted locally, the company refused to divulge further details. However, sources said that this makes a strategic entry for the company to the Indian market with a total deal size of $420 million. The APPM management will stay in place and employees would be retained in their current capacities, sources added.
LN Bangur, executive chairman, Bangur Group, said, ?We have built a strong business in India, and the next phase of growth requires a different set of resources and capabilities. International Paper is the right company to take the business forward and deepen maturity of the sector in India.?