Italian
The company will be comprised of its current business in North America including both legacy International Paper and DS Smith assets.
The separation is expected to be structured as a spin-off of the combined EMEA Packaging business to shareholders, and is expected to be completed in 12-15 months.
The original merger boosted the DS Smith division in the fruit and vegetable market.
International Paper said it intends to retain a meaningful ownership stake in the new company.
The EMEA Packaging business will be comprised of both legacy DS Smith and IP assets in EMEA. The separation will create two leading sustainable packaging solutions companies, each with separate management teams and business models, tailored investment and capital allocation strategies, and compelling financial profiles.
International Paper said it is focused on maximising value for shareholders through its 80/20 performance system and region-specific strategies.
Combining International Paper and DS Smith enabled the company to strengthen the businesses in both North America and EMEA.
Over the past year, the 80/20 approach enabled the company to recognise significant regional benefits, improve customer delivery and strengthen its relative supply position in both geographies.
Andy Silvernail chairman and chief executive, International Paper, said: “During the past year, we have created two regional powerhouses with scale, strong customer relationships, leading brands and talented teams. The two businesses operate in distinct market environments and are at different stages of their transformation. We have learned a lot about how to create value in each region. The next right step in our transformation journey to achieve full value creation potential is to create two independent, regionally focused companies. Taking this swift, decisive action now will enable both businesses to reach best-in-class performance and maximise long-term value creation through enhanced focus on their unique opportunities and targeted investment approaches.”
International Paper said the separation will provide International Paper with the focus and targeted capital allocation strategy to strengthen its market position further in North America.
Following the separation, International Paper intends to accelerate investment toward organic growth, productivity and disciplined strategic acquisitions, while maintaining a strong, investment-grade balance sheet.
Andy Silvernail will continue in his role, and Lance Loeffler will remain chief financial officer, and Tom Hamic will remain executive vice president and president, Packaging Solutions North America.
As an independent company, EMEA Packaging will be equipped to tailor its strategy and capital allocation to the specific characteristics of EMEA. The business will continue to execute its 80/20roadmap and is expected to make investments.