18 Sept. 2023: International Paper announced that it has completed the sale of its 50% interest in Ilim SA, the holding company for its Ilim joint venture, to its JV partners for $484 million in cash.
In addition, the company completed the sale of its outstanding shares in JSC Ilim Group to its JV partners for $24 million in cash and is divesting other non-material residual interests associated with Ilim. With the completion of these transactions, International Paper has divested all of its ownership interests in Ilim.
Ilim Group produces 75% of all Russian market pulp, 20% of cardboard and 10% of paper. The company's total annual production of pulp and paper products is over 3.6 million tons. It employs 17 thousand people.
International Paper announced the possible sale of its 50% stake in the Ilim Group in Russia in March 2022, immediately after the Russian invasion of Ukraine. International Paper first went into business in Russia in 1995, opening a small office in Moscow to explore opportunities.
Three years later, it bought a paper mill in Svetogorsk (Leningrad region), near the border with Finland, which was 125 years old. The plant produces office and offset paper, cardboard and thermomechanical mass. It employs 1.5 thousand people. In 2021, this plant became part of the Sylvamo, a spinoff of International Paper's global papers business. Sylvamo has sold this asset in 2023.
In 2007, International Paper acquired 50% of the Ilim Group for a $650 million deal. Most of the other half of the Ilim Group is owned by entrepreneur Zakhar Smushkin, who is the group's chairman of the board. A key element of the joint venture was a long-term investment program, as a result of which International Paper invested about $3.2 billion in the development of the group's production in ten years after joining the Ilim Group.
Since the beginning of the war in Ukraine, Western forest based companies have sold about 20 factories in Russia. This marked the largest exodus of Western business from the country in its modern history.