18 January 2005 – Stamford (CT): MeadWestvaco has announced the sale of its paper business and associated assets for $2.3 billion, in order to reduce debt and expand its packaging business in growth markets such as Asia, Eastern Europe and Latin America.
The sale, to a new company controlled by private New York-based investment firm Cerberus Capital Management, is expected to be completed in the Q2 of 2005.
It includes a handful of paper mills located in the eastern states of the US and 900,000 acres of forestland.
The transaction will leave MeadWestvaco with more than $6 billion in annual revenue. About three-quarters of that figure comes from its packaging business and one-third from international sources.
Cerberus, who will keep the current management team intact, will base the new company in Dayton, Ohio.
MeadWestvaco also disclosed that it expects Q4 earnings to fall sort of analyst expectations as a result of weakness in the paper unit.
