International Paper, a Tennessee-based global paper and packaging company, has acquired a 75% stake in Andhra Pradesh Paper Mills (APPM). International Paper purchased 53.5% of APPM’s shares from LN Bangur and related family members and affiliates for approximately US$257 million cash and a non-compete payment of US$62 million.
The company also acquired 21.5% of the minority shares in a public tender offer completed on 8 October for approximately US$104 million in cash, giving it a controlling stake in the Indian company.
The purchase is the biggest acquisition in the history of the Indian paper industry.
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APPM operates two mills in India, which produce 250,000 tonnes of uncoated freesheet paper every year. It caters to both the domestic and foreign markets and works through social and community programmes to increase green paper manufacturing.
APPM’s current management will continue to run operations with help from International Paper professionals, who will bring in leadership and technical resources. Paul Brown, the president of International Paper India, has assumed the role of executive chairman of APPM’s board of directors.
International paper has manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its core business is uncoated papers, industrial and consumer packaging and distribution. The company employs roughly 59,500 people in 24 countries.
Anand Prasad, a partner at Trilegal, and Christopher Krishnamoorthy, a counsel at the firm, advised International Paper on the deal. K Balakrishnan and Ashish Ambwani at Lazard India were the financial advisers to the equity providers. Ernst & Young advised the providers on financial due diligence and tax issues, while Haigreve Khaitan and Bhavik Narsana at Khaitan & Co acted as legal advisers to APPM.
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