International Paper Weighs Sale of European Packaging Arm, Months After Spin-Off Plan

International Paper, the Memphis-based packaging and pulp producer, said Thursday it is in active discussions with potential buyers for its European packaging business, opening an alternative path for the unit just nine months after the company said it would instead spin the business off to shareholders as a standalone public company.

In a statement issued Thursday afternoon, International Paper (NYSE: IP; LSE: IPC) said it is "evaluating unsolicited inbound inquiries" about its EMEA Packaging Business and is "in discussions with potential bidders," while cautioning that the process remains preliminary. The same notice was filed as a regulatory news announcement in London, where International Paper's shares also trade, after the company said recent movement in its stock price and press speculation prompted it to clarify its position.

"There can be no certainty that any sale of the EMEA Packaging Business will be agreed or completed."

The numbers

Investors treated the disclosure as good news. International Paper shares jumped as much as 8% intraday before closing up 6.9% at $34.10, according to a market summary of the day's trading, well below Wall Street's average analyst price target of $45.09 across 12 analysts covering the stock. The rally reflects a bet that a cash sale could unlock value faster, and at a cleaner price, than a drawn-out spin-off.

No price has been disclosed for the unit. The Financial Times has reported, citing people familiar with the matter, that private equity firms Lone Star and Atlas Holdings are separately exploring bids that could value the business at less than $6 billion — a figure that, if it holds, would sit well below the $7.2 billion International Paper paid last year to acquire DS Smith, the UK packaging group whose European assets form the core of the business now up for sale or spin-off.

How the company got here

International Paper closed its acquisition of DS Smith in 2025, creating a combined European packaging footprint spanning roughly 30 countries. By January 2026, management concluded the newly enlarged European operation and its North American business had little strategic overlap, and it told investors and regulators it planned to separate into two independent, publicly traded companies: a North America-focused International Paper and a new EMEA Packaging business built around the DS Smith brand.

That EMEA business has struggled since. Its operating loss widened to $80 million in the second quarter of 2026 from $51 million in the first, as volumes softened across European corrugated markets, and International Paper trimmed its full-year adjusted EBITDA target for the segment to a range of $900 million to $1 billion, down from $1 billion to $1.1 billion. Those results appear to have sharpened outside interest in the unit even as International Paper pressed ahead with spin-off planning; on October 14, the company said the separation would take the form of a primary listing on the London Stock Exchange paired with a Level II American depositary receipt program on the New York Stock Exchange.

Who is affected

A sale would touch tens of thousands of employees across the DS Smith and legacy International Paper packaging operations in Europe, the Middle East and Africa, as well as the customers, mills and box plants that depend on the business. It would also reshape the leadership transition already under way: International Paper had named Tim Nicholls, currently its chief financial officer, to become chief executive of the standalone EMEA company, with David Robbie set to chair its board. Those plans are now contingent on which path — spin-off or sale — ultimately wins out.

Private equity is reportedly circling. Atlas Holdings, a US-based industrial investor with a history of buying carve-outs from larger manufacturers, is named as one of the parties exploring a bid, according to the Financial Times reporting and confirmed by trade coverage tracking the deal. Lone Star Funds, a Dallas-based private equity firm, is the other. Neither firm has commented publicly, and International Paper has not named any bidder in its own disclosures.

The maneuvering around International Paper's European arm is the latest chapter in a packaging industry that has consolidated rapidly over the past two years. Brazilian pulp producer Suzano walked away from an approach for all of International Paper in 2024 after the US company signaled it preferred to pursue DS Smith instead, a deal regulators in Brussels and London ultimately cleared. Private equity firms have since grown more active in corrugated packaging specifically, drawn by steady demand for e-commerce boxes and shipping materials even as European manufacturing activity has lagged. A sale of the EMEA unit to a financial buyer such as Atlas Holdings or Lone Star would mark a different outcome from that earlier round of industrial consolidation — a carve-out sold for cash rather than folded into a larger strategic rival.

What comes next

International Paper says it is running both tracks in parallel rather than picking one. The company's statement gave no timeline for when it might choose between a sale and the planned listing, and it repeated that it is under no obligation to update the market again until a decision is made or disclosure rules require it. A previously scheduled "DS Smith Capital Markets Day," at which management had intended to lay out the standalone company's strategy to investors, remains on the calendar for November 3 — an event that will take on added significance if it instead doubles as a venue for addressing the sale talks.

Trade press tracking the mergers-and-acquisitions angle has flagged Atlas Holdings' involvement as the clearest sign yet that a deal, rather than a listing, could be the eventual outcome. International Paper is due to report third-quarter earnings on October 28, a date that will likely bring the first opportunity for executives to field detailed questions from analysts about which route they are leaning toward, how advanced the bidder discussions are, and whether the company's board has set a deadline for choosing.

For now, International Paper's position is deliberately noncommittal: continue preparing the spin-off, keep talking to bidders, and make no promises about either outcome. That stance leaves open the possibility that Europe's largest corrugated packaging business changes hands entirely, less than a year after International Paper argued that keeping a stake in it, rather than selling outright, was the better way to create value for shareholders.