Temple-Inland shareholders to vote Dec. 7 on IP's proposed US$3.7B acquisition; deal would give US$162M in combined 'golden parachute' pay to five top Temple-Inland executives

LOS ANGELES , November 8, 2011 () – Temple-Inland Inc. has scheduled a meeting on Dec. 7 for shareholders to vote on a proposed US$3.7-billion acquisition by International Paper Co., according to a securities filing on Monday, reported The Austin American-Statesman on Nov. 7.

Temple-Inland’s board of directors indicated in the filing that it recommends adoption of the agreement, the terms of which it has unanimously determined “are fair to, advisable and in the best interests” of the company, according to the filing.

In the agreement, a combined $162 million in “golden parachute” pay would be given to Temple-Inland’s top five executives, including Chairman and CEO Doyle Simons, the American-Statesman reported.

If the agreement is ratified by shareholders, it will still have to be approved by federal regulators as the merger of the two companies would represent about 40% of North America’s corrugated packaging materials market.

By revenue, International Paper is already the largest North American corrugated packaging producer, with $25 billion in 2010 revenue, and Temple-Inland is third largest, with $3.8 billion in annual revenue, reported the American-Statesman.

Austin, Texas-based Temple-Inland’s board approved the merger agreement on Sept. 6, after rejecting two earlier offers from Memphis, Tennessee-based International Paper.

The acquisition could be completed by this year-end, International Paper Chairman and CEO John Faraci said recently. The company has not indicated what changes it would make at Temple-Inland, which employs 10,500 companywide, the American-Statesman reported.

The successful bid of $32 per share was about 5% higher than International Paper’s initial offer, and calls for the company to assume $600 million in Temple-Inland debt, bringing the total value of the offer to $4.3 billion.

The merger agreement includes financial penalties if either company reneges on the deal or causes it to fall through, according to the filing, reported the American-Statesman.

The primary source of this article is The Austin American-Statesman, Austin, Texas, on Nov. 7, 2011.

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