Temple-Inland To Be Acquired by International Paper for $32/Share

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Last Update: 06-Sep-11 09:33 ET

Temple-Inland (TIN $30.58 +5.95) and International Paper (IP $24.83 -0.66) have announced 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 approx. $4.3 billion. The combination is expected to yield synergies of approx. $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.

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. 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.