International Paper  Co., Memphis, Tenn., USA, this week announced that it has entered into a definitive agreement to sell its foodservice business in China to Huhtamaki Hong Kong Ltd. International Paper's foodservice business in China has two plants and a workforce of approximately 200 employees. The transaction is expected to be completed in the next couple of months, subject to satisfaction of closing conditions, including obtaining required governmental approvals. 

During the past two years, the company has finalized the sale of its corrugated packaging business in China and Southeast Asia, along with the sale of its interest in a coated board joint venture business in China.  Although the Chinese and Asian markets remain strategically important for IP, the company has determined these markets can more effectively be served through its Ilim joint venture in Russia and with products exported from the U.S. and other parts of the world. 

The product range of the units to be acquired is similar to Huhtamaki's current product range in China, including paper cups for hot and cold beverages, food containers, as well as snack food and ice-cream containers. The net sales of the business to be acquired totaled approximately EUR 19 million in 2016. The debt free purchase price is EUR 15 million.

The business will become part of Huhtamaki's Foodservice Europe-Asia-Oceania business segment. The transaction is expected to be finalized within 1-2 months, subject to completing applicable registration obligations with authorities in China.