Paper and packaging company in the US, International Paper (IP) has signed an agreement with Brazilian corrugated packaging producer Jari Celulose, Embalagens e Papel in a bid to expand its global corrugated packaging platform in Brazil.
As part of the agreement, both the companies will form a joint venture (JV) which will support IP's strategy of growing its global packaging presence and better serving its global customer base.
The industrial packaging assets of Jari, a Grupo Orsa company, which include three containerboard mills and four box plants will be separated from its pulp and forestry businesses. They will be transferred to a newly formed company in which IP will own a 75% stake.
IP said it will invest BRL952m ($470m) in the JV.
IP chairman and chief executive officer John Faraci said the partnership fits well with the company's strategy to grow its packaging business globally in strategic regions of the world.
"We are excited about Brazil's growing market and this investment provides us with an attractive position with a strong return on investment," Faraci said.
Finalization of the transaction is expected early in the first quarter of 2013 and is subject to various closing conditions and governmental approvals.
