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International Paper Looks at Takeovers as Profit Seen Rising

Wednesday, 28 Jan 2015 09:56 AM

(Updates with CEO comment in third paragraph.)

(Bloomberg) -- International Paper Co., the world’s largest packaging company, is looking at acquiring assets in and outside of the U.S. as it forecasts a year of earnings growth.

The Memphis-based company is considering the purchase of U.S. box-conversion plants, which fold and shape cardboard boxes for specific customers, Chairman and Chief Executive Officer Mark Sutton said in a telephone interview on Wednesday. International Paper is also looking at box-conversion and containerboard acquisitions in Mexico, Brazil and Europe.

“We’re always looking for opportunities to improve our coverage of the market geographically, but also building better capabilities in what kinds of products we make,” Sutton said.

Earlier this week, U.S. packaging companies Rock-Tenn Co. and MeadWestvaco Corp. agreed to merge and create International Paper’s largest rival. That deal may drive International Paper to come up with an acquisition of its own to remain competitive, according to Todd Wenning, a Morningstar Inc. analyst.

While Sutton declined to comment on specific potential deals, he said antitrust regulators have all but ruled out allowing International Paper to acquire more U.S. containerboard-production assets.

“Given our size in U.S. containerboard, it’s difficult for us to do a whole lot more here,” he said.

International Paper said Wednesday its fourth-quarter profit excluding one-time items was 53 cents a share, topping the 48-cent average of 16 analysts’ estimates compiled by Bloomberg. Sales of $5.94 billion beat the $5.89 billion average estimate. The company forecast increased full-year earnings as North American demand increases.

“We feel like we’re coming into 2015 with a spring in our step and positive momentum,” Sutton said.

--With assistance from Brooke Sutherland in New York.

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net Steven Frank

© Copyright 2017 Bloomberg News. All rights reserved.

 
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Wednesday, 28 Jan 2015 09:56 AM
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