Memphis, Tenn.-based International Paper Company announced on Monday that it has completed its acquisition of Temple-Inland Inc.

The acquisition was completed through the merger of its wholly owned subsidiary, Metal Acquisition Inc.

Temple-Inland employs close to 500 people at its building materials facilities in Diboll. An IP official on Monday morning said the company plans to keep Temple-Inland’s Diboll facilities operating while it searches for “strategic options” for selling those assets.

“Temple has operated a good building products business, and as we’ve said many times before, we do not view these assets as core to International Paper,” said Tom Ryan, senior manager of public relations and employee communications for IP. “So we’ll be looking at the strategic options for selling this business. With signs of an improving housing market, that should also positively impact the prospects for selling the building products business. These are good assets, and in the interim, we’re going to operate them as Temple because they’ve got a good brand name; they’ve got a good market position.”

Under the terms of International Paper’s overall purchase of Temple-Inland, each issued and outstanding share of Temple-Inland common stock has been converted into the right to receive $32 in cash, without interest, and less any applicable withholding taxes, according to a press release. 

Including the assumption of approximately $700 million in Temple-Inland net debt, the total transaction value is approximately $4.5 billion, the press release stated.

“We are very pleased to have completed this compelling transaction,” said International Paper Chairman and CEO John Faraci in a statement. “The combination of International Paper and Temple-Inland strengthens our North American packaging business and enhances our ability to generate cash flow while maintaining our strong balance sheet.  We look forward to working with the employees of Temple-Inland as we successfully integrate our businesses and create an even stronger company with substantial benefits for our customers, employees and shareholders.”

As a result of the acquisition, Temple-Inland’s common stock ceased trading on the New York Stock Exchange Monday.

Mayor Bill Brown said it was a sad day for the people of Diboll and for the Temple family.

“We knew it was something that was going to happen. Effective tomorrow, everything is IP,” Brown said. “It’s just hard to describe. We’re still in the mode of not knowing what’s going to happen. That could drag out for months without any definite notice to us on what’s going to happen.”

Jim Wehmeier, president/CEO of the Lufkin/Angelina County Economic Development Partnership, said there are still plenty of unknowns as far as the company’s Angelina County operations are concerned.

“Our No. 1 and really only goal is to keep the 500 people who are working out there working — not short-term, but long-term — keep the Temple-Inland name in East Texas and to make sure that they have long-term viability,” Wehmeier said. “We understand that we don’t control that, but we’re not being bashful about what we’d like to see happen there and how we would like to work with all parties involved to find a good solution.”

The U.S. Department of Justice last week entered into a consent decree with the companies that allowed the merger to proceed. Under the terms of the consent decree, the combined company will divest 970,000 tons of container board mill capacity within six months. The company also plans to sell Temple-Inland’s facilities in Ontario, Calif., and New Johnsonville, Tenn., and International Paper’s facility in Hueneme, Calif.

Temple-Inland began in Diboll as the Southern Pine Lumber Company in the 1890s. Founded by lumberman Thomas Lewis Latane Temple and other partners, Diboll became first and foremost a sawmill town, according to “Land of the Little Angel, A History of Angelina County, Texas.”

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