NORCROSS, Ga. (AP) -- International Paper Co., the paper company, said Tuesday that it will merge its Xpedx business with Unisource Worldwide Inc. and create one large publicly traded packaging and printing distribution company.
The merger is expected to be completed in the middle of 2014. The new company will seek to list its shares on the New York Stock Exchange.
International Paper will receive $400 million for Xpedx. Shareholders of International Paper will own 51 percent of the new company, and UWW Holdings, the parent company of Unisource Worldwide, will own the remaining 49 percent. UWW Holdings is owned by an affiliate of private equity firm Bain Capital and paper company Georgia-Pacific.
Six years after the merger closes, International Paper will have the right to receive a one-time payment worth up to $100 million. The amount International Paper receives will be based on the new company's earnings.
Mary Laschinger, Xpedx's president, will become CEO and chairman of the new company. Allan Dragone, Unisource's CEO and president, will be a director and help with the merger.
The new company will be based in the Atlanta area and will also keep Xpedx's headquarters in Loveland, Ohio, and Unisource's headquarters in Norcross, Ga. It will have 9,500 employees and 170 distribution centers around the country.
Shares of International Paper, which is based in Memphis, Tenn., rose 36 cents to $46.10 in morning trading Tuesday.