Dive Brief:
- International Paper announced Thursday it plans to split into two independent, publicly traded companies based on geography, following its acquisition of U.K.-based DS Smith in January 2025.
- Going forward, IP would be made up of the current North American business, which includes legacy assets from both IP and DS Smith. The Europe, Middle East and Africa business would include legacy assets from both companies in that region. IP’s current EMEA business operates in 30 countries across the region.
- IP expects to complete the spinoff in the next 12 to 15 months, pending board and regulatory approvals in both the United States and United Kingdom.
Dive Insight:
The announced spinoff continues the period of change International Paper has undergone in the last year and a half, including moves such as the DS Smith acquisition, business unit divestitures, leadership changes and footprint optimization that has resulted in thousands of layoffs.
"I recognize that this action, understandably, is a surprise to most of you," said CEO Andy Silvernail on Thursday's earnings call, much of which executives devoted to discussing the proposed company split.
IP reported in its earnings release Thursday that its North American business had $15.2 billion in sales in 2025, while its EMEA business had $8.5 billion. Overall, the company reported a $2.84 billion loss for the year.
With the split, the EMEA business would be structured as a spinoff, of which IP intends to “retain a meaningful ownership stake.” The new company is expected to be listed on both the London Stock Exchange and the New York Stock Exchange.
Andy Silvernail, who became CEO of International Paper in May 2024, will remain in that position. IP CFO Lance Loeffler and Executive Vice President and President of Packaging Solutions North America Tom Hamic both will remain in those positions as well.
Tim Nicholls will serve as CEO of the new publicly traded EMEA packaging company. In February 2025, IP had announced that on April 1 Nicholls would become executive vice president and president of DS Smith, an International Paper company.
"We are still at an early stage of transformation to optimize our footprint, structurally reduce costs and extend our innovation leadership, but we expect to begin seeing the benefits of these actions in 2026," Nicholls said during Thursday's call. "The separation will enable us to accelerate this progress, enhancing the new company's ability to make both organic and inorganic investments."
IP noted in Thursday’s news release that it has “complied with its post-offer intention statements regarding DS Smith” outlined in the finalized acquisition transaction. These statements include IP’s intent “to move quickly” to combine the businesses; that IP’s leadership would lead the group board; and that operations would continue as-is at IP’s European manufacturing sites and DS Smith’s North American manufacturing sites.
Upon taking over the CEO role in 2024, Silvernail quickly began implementing what he calls the 80/20 efficiency plan to optimize the business with cost-cutting measures.
"While our portfolio is changing, the core strategic principles and the operating models are not. 80/20 is the driver for our transformation," Silvernail said. He reiterated Thursday that the two legacy companies are in different stages of their transformation plans, a refrain he repeated throughout 2025.
When an analyst asked whether the extended timeline to implement 80/20 in Europe, along with sluggish European market conditions, played into the decision to split the company, Silvernail responded, "No, not at all." The decision was driven by what IP has learned during the integration and streamlining, particularly about the two businesses’ regional needs and value creation prospects, he said.
Combining IP and DS Smith enabled progress with removing costs and implementing an optimization program in both regions, Silvernail said. "It created two regional powerhouses that really have very, very, very little overlap."
But splitting them now will allow each business to focus on its regional strengths, challenges and opportunities.
"Creating independent companies will further enable the businesses to win in distinctive competitive markets through focused leadership, tailored commercial strategies, independent balance sheets and flexible capital allocation aligned to attractive — but different — in-region opportunities," Silvernail said.
IP intends to invest $400 million into the EMEA business this year to set it up for success once it spins off, executives said. Executives expect 2026 earnings to reflect substantial restructuring costs
Regarding the lengthy timeline for completing the split, Silvernail said IP will work as quickly as possible but "it's a heavy lift from an accounting perspective."
Editor’s note: This story has been updated with additional information and comments from International Paper’s Jan. 29 earnings call.
