International Paper Streamlines Distribution

International Paper has completed its acquisition of Zellerbach for $263 million. It will become part of xpedx, IP's distribution business.

"This combination will expand xpedx into seven new markets and strengthen our presence in 25 key markets," said Thomas E. Costello, International Paper's senior vice president of distribution and the president of xpedx. "It also will greatly enhance our packaging distribution capabilities."

The consolidation of the two companies will add $1.2 billion to existing xpedx sales, bringing the combined annual sales to about $6 billion. As part of the consolidation, the company said it would close over 25 facilities and eliminate $100 million in operating costs from the combined organization. Details on the merging of redundant facilities will be finalized over the next three months.

Costello added, "These actions will help us to provide our customers with the most cost-effective service possible. Our customers also will benefit from the broader range of products that we will be able to offer."

Headquartered in Covington, KY, xpedx distributes printing, packaging, industrial and graphic arts supplies and equipment. The combined organization -- xpedx and Zellerbach -- employs nearly 9,500 people and has more than 350 distribution locations, including warehouses and stores, in 45 states, Mexico and Europe.

International Paper, in its 100th year of operation, is a worldwide producer of printing papers, packaging and forest products. The company also operates specialty businesses in global markets, as well as xpedx, its distribution business.