Klabin buys paper and cardboard business from IP for R$ 330 million

Klabin announced on Sunday night the acquisition of the packaging and corrugated paper business of International Paper do Brasil (IP) for 330 million reais. According to Klabin, the documents required for the purchase have already been signed. The business foresees investment of 280 million reais to be paid at the close of the operation and 50 million reais after one year, subject to contractual conditions. Corrugated cardboard operation is the focus of the operation, Klabin said in a statement. The IP plant has a production capacity of 305,000 tons of the product per year and its sales represented a 6.6% share of the domestic market, according to Klabin, citing 2018 data from the Brazilian Corrugated Cardboard Association (ABPO). In the packaging paper segment, the capacity is 310,000 tons per year. In a presentation disclosed to the market, Klabin also states that there are opportunities for integration between IP's assets and its own paper segment. "The transaction is aligned with Klabin's strategy of growth in the paper and paper packaging business, expanding the company's operational flexibility and bringing greater stability to its results," Klabin said in a statement. The IP operations acquired by Klabin are in Manaus, Amazonas, Rio Verde, Goiás, and four cities of São Paulo. With the acquisition, Klabin also began operating in the Midwest, where it was not previously. Klabin states that the purchase will be paid with its own resources and that the deal will have an "immaterial" impact on its financial leverage indices. The deal still needs to pass approval from Cade, the competition's defense body. The agreement marks ip's departure from the packaging and cardboard paper market in Brazil. The American company also has two other printing and writing paper factories in the country.