International Paper (IP), Memphis, Tennessee, has entered into an agreement to sell its 90.38 percent ownership interest in Olmuksan International Paper to U.K.-based Mondi Group, a global paper and packaging firm, for about 66 million euros (about $81 million).
According to a news release on the transaction from IP, the Olmuksan business includes corrugated packaging facilities in Turkey with an approximate annual revenue of 150 million euros ($184 million).
IP issued a notice in October 2020 indicating it was exploring the sale of its stake in Olmuksan. That notice stated IP was evaluating “various alternatives for the packaging press business in Turkey” that included “sale to potential investors or sale in the relevant share market of Borsa İstanbul Financial advisors.”
A press release from Mondi Group says Olmuksan serves “a diverse customer base with high-quality sustainable packaging for food, beverage, agriculture and industrial applications.” For the 12 months ended Sept. 30, 2020, the company produced 256,000 metric tons of corrugated packaging.
The companies say the transaction is expected to close in the first half of 2021, subject to certain closing conditions and regulatory approvals.
Following the completion of the transaction, Mondi Group states that it plans to launch a mandatory tender offer to acquire the remaining 9.62 percent of the outstanding shares in the company held by minority shareholders. Mondi says its current Turkish footprint includes four corrugated packaging plants and a recycled containerboard paper mill, as well as three flexible packaging sites.
“We are excited by this unique opportunity to significantly strengthen our position in the fast-growing Turkish corrugated market and expand our offering to existing and new customers in the region,” says Andrew King, group CEO of Mondi.
IP reports that this action is in line with its strategy to serve markets from an advantaged position. The company says corrugated packaging remains a strategic business for IP in Europe, the Middle East and Africa.