International Paper, a major company in sustainable packaging, is implementing significant changes to reduce costs and enhance service. They have agreed to sell their Global Cellulose Fibers (GCF) business to American Industrial Partners (AIP) for $1.5 billion.
This deal includes $190 million in special stock and is expected to be finalized by the end of the year, pending regulatory approval. The sale is part of International Paper’s plan to focus more on packaging solutions.
The GCF business produces pulp used in products such as tissues, diapers, and other personal care items, as well as in construction materials and paints. In 2024, GCF made $2.8 billion in revenue, has 3,300 employees, nine factories, and eight offices worldwide.
International Paper is also making changes in North America to improve how it serves customers:
-The company is investing $250 million to update a machine at the Riverdale mill in Alabama to make containerboard.
-The company will permanently close mills and a packaging facility in Savannah, Georgia, and Riceboro, Georgia.
These closures will affect approximately 1,100 employees, who will receive severance packages and assistance in finding new jobs. The upgrades at Riverdale are expected to be completed by the third quarter of 2026. The other mills and the Savannah facility will close in stages by the end of September 2025. Overall, these changes are expected to reduce International Paper’s annual production by approximately one million tons.
Advisors: Morgan Stanley served as the financial advisor, and Debevoise & Plimpton and McCarthy Tétrault provided legal counsel to International Paper in connection with the sale of the Global Cellulose Fibers business.
KEY QUOTES:
“GCF is a strong business, and I’m pleased to see it transitioning to AIP, which is focused on investing in and growing industrial businesses. Over the past few months, GCF has done the hard work of aligning resources with its most strategic customers, implementing an 80/20 mindset, and creating a simplified and focused portfolio. These actions, combined with its talented and committed team made it an attractive investment for AIP to enter the pulp market and have positioned GCF for long-term success under new ownership.”
IP Chief Executive Officer Andy Silvernail
“GCF is well-positioned for future growth, supported by its large and sustainable wood basket, durable end markets, industry leading quality and innovation, long-term customer relationships, deeply knowledgeable employees, and well-invested facilities. We look forward to partnering with GCF Senior Vice President Clay Ellis and the rest of the talented and tenured management team to implement their growth vision.”
Rick Hoffman, Partner at AIP
“We understand how deeply these decisions affect our employees, their loved ones, and the surrounding communities. We are committed to supporting both our employees and customers as we navigate this transition.”
“While difficult, these decisions are essential to positioning International Paper for long-term success, enabling us to focus on the geographies, customers, and products where we can create the most value. Our investment in the Riverdale mill reflects our commitment to delivering high-quality, reliable service while strengthening our advantaged cost position.”
Tom Hamic, Executive Vice President and President of International Paper’s North America Packaging Solutions business
