International Paper Completes Strategic Divestiture of Five European Corrugated Box Plants to PALM Group
On July 1, 2025, International Paper (NYSE: IP; LSE: IPC), a global leader in sustainable packaging solutions, announced the successful completion of the divestiture of five European corrugated box plants to PALM Group. This divestiture fulfills regulatory commitments tied to International Paper’s acquisition of DS Smith Plc, a transformative deal that positions the combined entity as an industry leader in the North American and EMEA regions.
The divested assets include three plants in Normandy, France (Saint-Amand, Mortagne, and Cabourg), one box plant in Ovar, Portugal, and one box plant in Bilbao, Spain. This strategic move was mandated by the European Commission as a condition for approving the acquisition of DS Smith Plc, which was valued at approximately $9.9 billion and completed in early 2025. By satisfying these regulatory requirements, International Paper has solidified its compliance and advanced its integration strategy.
Financial Context and Impact: - International Paper reported net sales of $18.6 billion in 2024, reflecting its substantial scale in the packaging sector. - The acquisition of DS Smith, completed in early 2025, is expected to enhance International Paper’s market presence and revenue streams in the attractive and growing North American and EMEA markets. - As of Q3 2024, International Paper’s operating margin stood at 5.11%, with a net profit margin of 3.26%, indicating solid profitability amid integration efforts. - The company’s revenue growth rate for the year ending Q3 2024 was slightly negative at -0.94%, reflecting transitional impacts from the acquisition and divestiture activities.
Strategic Significance: This divestiture aligns with International Paper’s commitment to sustainable packaging and operational efficiency. PALM Group, a family-owned European leader in containerboard and corrugated packaging, operates 33 corrugated box plants and reported a turnover of €2 billion in 2024. The transfer of these facilities to PALM ensures continuity of high-quality production and service for customers in Europe.
The acquisition of DS Smith and the subsequent divestiture demonstrate International Paper’s strategic focus on expanding its footprint while adhering to regulatory frameworks. The combined company, headquartered in Memphis, Tennessee, with an EMEA headquarters in London, is poised to leverage synergies and drive growth in sustainable packaging solutions globally.
Insights from Previous Earnings Calls: International Paper’s management has consistently emphasized the importance of regulatory compliance and strategic acquisitions in driving long-term growth. The completion of this divestiture fulfills a critical milestone discussed in prior earnings calls, where management highlighted the need to satisfy European Commission conditions to unlock the full value of the DS Smith acquisition.
Looking Forward: The integration of DS Smith is expected to enhance International Paper’s competitive positioning in the packaging industry, particularly in the North American and EMEA regions. The company’s focus on sustainability, operational excellence, and regulatory adherence positions it well for future growth despite near-term revenue fluctuations.
For more detailed information, please refer to the original 8-K filing: International Paper 8-K Filing.
Tags: IP, International Paper, Q3 2024, DS Smith Acquisition, European Divestiture, Sustainable Packaging