International Paper, the US-based paper and packaging major, has entered into agreements with Kolkata-based L N Bangur Group to buy 53.5 per cent stake in Andhra Pradesh Paper Mills for approximately $257 million.
In addition, International Paper has agreed to a $62-million non-compete payment to the sellers, International Paper said in a statement in Hyderabad.
Subject to Indian securities law, International Paper will also launch a mandatory public tender offer to acquire up to an additional 21.5 per cent of the outstanding shares of APPM for approximately $104 million in cash, it said.
International Paper anticipates acquiring up to 75 per cent of APPM's outstanding shares through these two transactions. Once completed, the transactions will position the US company as the first global paper and packaging firm with a significant position in India's fast growing economy, the statement said.
"APPM is an established and highly respected company, and is an excellent platform for International Paper to grow with the Indian paper and packaging market," said John Faraci, Chairman and Chief Executive Officer of International Paper.
"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," Faraci said.
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