Ilim Pulp is the largest forest industry corporation in Russia, and one of the world's top 10 companies in terms of merchantable wood output, forest stocks and logging. The company accounts for 60% of Russia's paper pulp and 50% of containerboard.
"We held a closed tender involving several major world companies. As a result, we made a decision together with International Paper to set up a joint venture. We are confident that this decision is the right one," said Zakhar Smushkin, chairman of the Ilim Pulp board of directors.
International Paper will acquire a 50% stake in Ilim Holding, which owns more than 75% of Ilim Pulp's shares, to form the joint venture.
Ilim Holding is estimated to be worth $1.3 billion, but the parties declined to give the sum of the deal, saying it will become known in the first quarter of 2007 when the transaction is completed.
Ilim Pulp's sales totaled $1.5 billion in 2005 and its earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $240-250 million, Smushkin said.
The joint venture is expected to produce high value-added products, such as office paper and packaging.
International Paper is the world's largest forest industry company, with enterprises in more than 40 countries.
