Pursuant to Indian securities law, IP will also launch a mandatory public tender offer to acquire up to an additional 21.5% of the outstanding shares of APPM for approximately Rs 463-cr. IP anticipates acquiring up to 75% of APPM’s outstanding shares through these two transactions.

APPM is one of the leading integrated paper manufacturers in India, with two mills with combined capacity of about 2,50,000 metric tonnes of uncoated freesheet paper annually. The existing management team and 2,500 employees of APPM will continue to operate the business, supplemented by additional IP technical resources.

"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 IP.

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."

In addition, IP has agreed to Rs 300-cr non-compete payment to the sellers. The share purchase and public tender are expected to be completed as early as the third quarter of 2011.