International Paper closed the deal to sell 50% of Ilim to Russian beneficiaries

American paper manufacturer International Paper has closed a deal to sell a 50% stake in the Swiss holding company Ilim SA to Russian beneficiaries Zakhar Smushkin and Boris Zingarevich. Ilim SA owns (96.37%) the largest producer of pulp and paper products in Russia – the Ilim group, Reuters and Interfax report, citing a message from the Russian company. According to information “Kommersant-SPb”the transaction amount with a significant discount amounted to $484 million.

As a result of the transaction, International Paper’s Russian partners received control over the Russian assets of Ilim SA. The deal became known in January of this year, at the end of March the agreement approved subcommittee of the government commission for monitoring the implementation of foreign investments in the Russian Federation.

International Paper entered the capital of Ilim SA in 2007, paying $650 million. The company directly owned a 2.39% stake in the group. As Interfax notes, the parties also agreed to sell these shares for $24 million.

Ilim is the largest forestry company in Russia, accounting for 75% of the output of all Russian commercial pulp, 20% of cardboard and 10% of paper. The group includes three pulp and paper mills, two corrugated plants and the Sibgiprobum design institute. International Paper became a strategic partner of the Ilim Group in a joint venture in 2007, when it acquired 50% of Ilim Holding for $650 million.

Erdni Kagaltynov