Can International Paper Replace the Revenues of its Divested Assets?
When International Paper decided to focus its business on uncoated paper and industrial and consumer packaging and to divest from its other segments, the company took a substantial risk in concluding that it would be able to replace the revenue generated by the divisions and eventually profit from the divestiture of these assets. Although the company is cutting operation costs and saving some money, most of the risk lies in the company’s ability to recapture the $3.49 billion annual revenue[4] that its departed divisions contributed to the balance sheet. This means that the company will have to either produce and sell more of its current products or spend money on R&D to create new and profitable items.
