International Paper Announces Agreement To Acquire Temple-Inland

International Paper and Temple-Inland, Inc. announced on September 6 that they have entered into a definitive merger agreement under which International Paper will acquire all of the outstanding common stock of Temple-Inland for $32.00 per share in cash, plus the assumption of $600 million in Temple-Inland’s year-end debt. The total transaction value is approximately $4.3 billion.

As contemplated by the merger agreement, International Paper will terminate its existing tender offer to acquire all of the outstanding common shares of Temple-Inland for $30.60 per share, and Temple-Inland will hold a special meeting of its stockholders to vote on the transaction. In addition to the approval of Temple-Inland’s stockholders, the transaction is subject to customary closing conditions, including antitrust approvals.

The merged companies are expected to yield synergies of approximately $300 million annually within 24 months of closing, derived primarily from the areas of operations, freight, logistics, selling expense and overhead. The companies have a shared focus on low-cost mills, complementary converting systems and high levels of box integration. Temple-Inland’s products and manufacturing facilities are an excellent strategic fit with International Paper’s current offerings and facilities.

The combination, which has been approved by the boards of both companies, brings together two strong North American corrugated packaging businesses to create an even stronger company. It offers numerous benefits for the shareholders and customers of both companies, and is consistent with International Paper’s focus on achieving and sustaining cost of capital returns throughout the cycle. The transaction is expected to be accretive to International Paper’s shareholders in year one after closing. It is expected to close in the first quarter of 2012.