International Paper Charts New Course with Major Corporate Split
04.02.2026 - 08:56:04
International Paper is embarking on a profound strategic shift. Following its acquisition of DS Smith, the packaging giant has unveiled plans to separate into two independent, publicly traded companies focused on North American and EMEA markets, respectively. This move is designed to create regionally focused entities with dedicated capital structures, aiming for greater agility in responding to local market dynamics.
The separation is targeted for completion within the next 15 months. This announcement comes as the company reports its fourth-quarter 2025 results and finalizes a significant divestiture.
The company's latest earnings provided a mixed picture. For Q4 2025, revenue saw a substantial 53% year-over-year increase to $6.01 billion, surpassing market expectations. However, adjusted earnings per share came in at -$0.08, missing consensus estimates. Full-year 2025 revenue totaled $23.63 billion.
Concurrent with the split plans, management is actively streamlining its portfolio. The sale of its Global Cellulose Fibers (GCF) business to American Industrial Partners was finalized yesterday. This transaction, valued at $1.5 billion, represents a core element of the ongoing operational restructuring.
Operational Restructuring and Cost Goals
The transformation will have tangible impacts on International Paper's operations. In the current year, the company anticipates closing at least seven manufacturing facilities and reducing its workforce by over 700 positions, with a particular focus on the EMEA region. These measures are projected to generate annual cost synergies of approximately $510 million.
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To prepare the future standalone EMEA business for independence, the group has earmarked around $400 million in capital investments for 2026.
Analyst Reaction and Market Context
The market response to these sweeping changes has been measured. Investment bank UBS downgraded its rating on International Paper stock to "Neutral" on Monday. Analysts cited the persistent transformation costs expected to weigh on earnings through 2026 and 2027.
The strategic rationale hinges on whether a sharper regional focus will yield long-term benefits despite near-term financial pressures. A potential tailwind exists in the market environment: the flexible packaging papers segment is entering a growth phase, with global volume projected to reach nearly $79 billion by 2026.
Under the new structure, the North American company will hold the core assets of International Paper combined with certain DS Smith operations. The EMEA entity will also be formed from a combination of assets from both legacy organizations.
Investors can expect further details on the separation progress when International Paper releases its first-quarter 2026 results on April 29, 2026.
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