Pursuant to Indian securities law, IP will also launch a mandatory public tender offer to acquire up to an additional 21.5% of the outstanding shares of APPM for approximately $104 million in cash. IP anticipates acquiring up to 75% of APPM's outstanding shares through these two transactions.
Once completed, the transaction will position IP as the first global paper and packaging company with a significant position in India's fast growing economy. APP has annual sales of approximately $160 million.
"APPM is an established and highly respected company in India, and is an excellent platform for IP to grow with the Indian paper and packaging markets," said John Faraci, chairman and CEO of IP. "Both APPM and the India paper and packaging industry are growing at substantial rates, and we believe that IP's global operations and technical expertise can accelerate that growth and create value for customers as well as IP and APPM shareholders."
L.N. Bangur, executive chairman, Bangur Group, noted that "we have built a strong business in India, and the next phase of growth requires a different set of resources and capabilities. IP is the right company to take the business forward and deepen maturity of the sector in India."
APPM is one of the leading integrated paper manufacturers in India, with two mills having a combined capacity of about 250,000 metric tpy of uncoated freesheet paper. The existing management team and 2,500 employees of APPM will continue to operate the business, supplemented by additional IP leadership and technical resources.
The share purchase and public tender are expected to be completed as early as the third quarter, subject to regulatory and other approvals, including the Security and Exchange Board of India (SEBI), the Reserve Bank of India (RBI), and, if applicable, the Competition Commission of India.
TAPPI
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