Why International Paper Rallied Today
International Paper may be closing in on a sale of its struggling European segment.
Shares of International Paper (IP) surged 7.6% on Thursday, reaching 2:28 p.m. EDT, following news that two private equity firms may bid for the company's European business. The European segment, formerly known as DS Smith, was purchased by International Paper for $9.9 billion in 2024, but has since struggled with revenue declines and operating losses.
Reports indicate that the total sale price could be below $6 billion, a 40% discount to the original purchase price. While this sale would alleviate some pressure on International Paper's overall results, the company still carries $8.5 billion in net debt. The North American segment, which has remained profitable, saw a 4.5% revenue decline and 26.4% operating income drop in the last quarter.
With both the European and North American businesses showing signs of struggling, today's rally may be a one-off relief rally rather than a positive indicator for the company's future growth prospects in the paper packaging industry.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
Also reported by 1 other outlet
- Why International Paper Rallied Today nasdaq.com
