International Paper Co. announced Thursday that it will sell its global cellulose fiber business to private equity powerhouse American Industrial Partners (AIP) for $1.5 billion, marking a dramatic step in its pivot toward sustainable packaging solutions. The blockbuster deal—navigated by no fewer than five law firms—signals the exit of one of the world’s largest paper producers from a business long central to its identity.

Debevoise & Plimpton LLP and McCarthy Tétrault LLP are guiding International Paper through the transaction, while AIP has enlisted a heavyweight team: Davis Polk & Wardwell LLP for the deal itself, Ropes & Gray LLP on financing, and Baker Botts LLP on regulatory issues.

Behind the Curtain: Why GCF Is on the Block

The company had flagged last fall that it was exploring “strategic alternatives” for its Global Cellulose Fiber (GCF) business, which churned out $2.8 billion in revenue in 2024. The unit produces pulp for personal care products, paints, coatings, and construction materials, with a workforce of 3,300 employees across nine manufacturing plants and eight offices worldwide.

“GCF is a strong business, and I’m pleased to see it transitioning to AIP, which is focused on growing industrial businesses,” said CEO Andy Silvernail. He added that GCF’s sharpened portfolio, emphasis on key customers, and streamlined operations made it “an attractive investment for AIP to enter the pulp market.”

The $1.5 billion package includes preferred stock with an initial liquidation preference of $190 million—meaning AIP gets first claim on that amount if the business is ever sold or dissolved. The deal is expected to close by year-end, pending regulatory approval.

AIP’s Play in Pulp

American Industrial Partners sees the cellulose fiber division as a natural extension of its industrial portfolio. “GCF is well-positioned for future growth,” said AIP partner Rick Hoffman. “Its sustainable wood basket, resilient end markets, and industry-leading innovation make it a powerful platform for long-term expansion.”

AIP’s bet on pulp dovetails with macroeconomic forces: rising global incomes, population growth, and consumer demand for hygiene and construction products. BofA Securities is serving as AIP’s exclusive financial adviser and has committed financing in place.

A Broader Recalibration

The divestiture follows International Paper’s $7.2 billion acquisition of DS Smith PLC, which closed earlier this year after European regulators forced the company to sell off overlapping assets. With GCF gone, International Paper doubles down on its packaging empire—betting that the future of the company lies not in fiber pulp, but in boxes and sustainable packaging that fuel global e-commerce and supply chains.