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International Paper Acquiring Majority Interest in Andhra Pradesh Paper Mills of India

Memphis, Tennessee, USA, 29 March 2011 -- /PRNewswire/ -- International Paper (NYSE: IP) has entered into agreements with L.N. Bangur and related family members and affiliates to purchase approximately 53.5% of the outstanding shares of Andhra Pradesh Paper Mills (NSE: APPAPER | BSE: 502330) for approximately USD 257 million in cash. In addition, International Paper has agreed to a USD 62 million noncompete payment to the sellers.

Pursuant to Indian securities law, International Paper also will launch a mandatory public tender offer to acquire up to an additional 21.5% of the outstanding shares of APPM for approximately USD 104 million in cash. International Paper anticipates acquiring up to 75% of APPM's outstanding shares through these two transactions.

Once completed, the transaction will position International Paper as the first global paper and packaging company with a significant position in India's fast growing economy.

"APPM is an established and highly respected company in India, and is an excellent platform for International Paper to grow with the Indian paper and packaging markets," said John Faraci, chairman and chief executive officer of International Paper. "Both APPM and the India paper and packaging industry are growing at substantial rates, and we believe that IP's global operations and technical expertise can accelerate that growth and create value for customers as well as IP and APPM shareholders."

L.N. Bangur, executive chairman, Bangur Group, said, "We have built a strong business in India, and the next phase of growth requires a different set of resources and capabilities. International Paper is the right company to take the business forward and deepen maturity of the sector in India."

"International Paper has a proven track record of bringing global best practices in operational excellence, industrial safety, as well as social responsibility into our emerging market investments, and we intend to do the same in India with APPM," said Tom Kadien, senior vice president of IP's Consumer Packaging and IP Asia businesses. "This investment will be positive for employees and their communities, customers, shareholders and the state of Andhra Pradesh."

APPM is one of the leading integrated paper manufacturers in India, with two mills with combined capacity of about 250,000 metric tons of uncoated freesheet paper annually. The existing and capable management team and 2500 employees of APPM will continue to operate the business, supplemented by additional IP leadership and technical resources.

The share purchase and public tender are expected to be completed as early as the third quarter of 2011, subject to regulatory and other approvals, including the Security and Exchange Board of India (SEBI), the Reserve Bank of India (RBI), and, if applicable, the Competition Commission of India (CCI).

Andhra Pradesh Paper Mills (APPM), part of the Kolkata-based L.N. Bangur group, established in 1964, is a leading manufacturer of pulp and paper products and caters to both the domestic and foreign markets. With two manufacturing units in Andhra Pradesh and a total paper production capacity of 250,000 metric tons per annum, APPM produces writing and printing and copier papers. With sales of approximately USD 160 million, focused social and community programs backed up with its own pioneering work in raw material generation through social farm forestry and a very strong strategic growth focus, APPM is becoming a driving force in the green paper manufacturing arena in the world economy. For more information on APPM, visit www.andhrapaper.com.

International Paper (NYSE: IP) is a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia, and North Africa. Its businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the company's North American distribution company. Headquartered in Memphis, Tennessee, the company employs about 59,500 people in more than 24 countries and serves customers worldwide. Net sales for 2010 were more than USD 25 billion. For more information about International Paper, its products, and stewardship efforts, visit internationalpaper.com.


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