International Paper (IP) will exit from Chinese coated board joint venture (JV) by selling its 55% stake to JV partner Shandong Sun Holding for $23m.
The IP-Sun JV operates one manufacturing facility with four paper machines in Shandong Province, China where it manufactures close to 1.4 million metric tons of coated board every year.
Subject to closing conditions, including Chinese governmental approvals, the transaction is expected to be completed within the next six months.
Upon completion of the deal, the company will remove close to $400m of currently outstanding debt from its balance sheet, along with the other assets and liabilities of the JV.
International Paper is also considering strategic options for its corrugated box business in China and South Eas,t Asia and has signed a non-binding letter of intent with a prospective buyer based in China.
The company's industrial packaging Asia business employs 3,000 people across 18 corrugated box plants in China and South East Asia.
International Paper chairman and CEO Mark Sutton said: "International Paper undertook a thorough review of its position in serving the Chinese and Asian markets.
"The company remains committed to serving these very important markets, but concluded we could be more effective supplying this region with globally competitive products primarily through our Ilim joint venture in Russia and from the US."
With around 58,000 employees, International Paper has manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa.
Its businesses include industrial and consumer packaging along with uncoated papers and pulp.
In April this year, International Paper agreed to divest Carolina coated bristols brand to MeadWestvaco.
International Paper decided to sell the brand as it wanted to convert its Riegelwood mill to a 100% fluff and softwood pulp production facility.
