The competing paths could deliver quite different outcomes to shareholders. A spinoff would leave them with interests in a North American packaging company and a separately traded European business, subject to the final distribution structure. A sale could instead give International Paper cash to reduce debt or deploy elsewhere, but would eliminate the chance for shareholders to own the European operation directly through a distribution.
A spinoff with a sale process running alongside it
International Paper announced the regional separation in January and, on October 14, identified the proposed standalone European company as DS Smith plc. Its shares were expected to trade on the London Stock Exchange, with a Level II American depositary receipt program on the New York Stock Exchange. The company also set a November 3 capital markets day in London, led by prospective DS Smith CEO Tim Nicholls and CFO Vincent Bonnot.
One day later, International Paper acknowledged a possible sale. The Financial Times reporting summarized by Reuters identified Lone Star and Atlas Holdings as possible bidders and placed potential bids below $6 billion. International Paper has not identified a bidder, endorsed that valuation, announced a binding offer or guaranteed a transaction. It also withdrew any assurance about the ultimate timing or structure of the separation.
The current spinoff plan itself remains preliminary. In its second-quarter Form 10-Q, IP said it expected to retain approximately 20% of the EMEA company, implying a distribution of roughly 80% if that structure ultimately survived. The October 15 statement did not reaffirm a final retained percentage, distribution ratio, record date or timetable.
What the segment numbers say about the choice
The two geographic businesses have different profitability profiles. International Paper’s first-half 2026 segment figures show that EMEA produced $4.61 billion in sales but recorded a $131 million segment operating loss, while North America generated $7.314 billion in sales and $452 million of segment operating profit. Those figures translate into operating margins of approximately negative 2.8% and positive 6.2%, respectively, using the company’s reported segment measure.
| First half of 2026 | North America | EMEA / planned DS Smith |
|---|---|---|
| Net segment sales | $7.314 billion | $4.610 billion |
| Segment operating profit (loss) | $452 million | ($131 million) |
| Calculated segment operating margin | 6.2% | (2.8%) |
The gap is material for the valuation debate. The European business accounted for about 39% of the two segments’ combined first-half sales, yet it reduced their combined operating earnings. EMEA’s second-quarter operating loss widened to $80 million from $51 million in the first quarter, even as management continued cost reductions in a weak European packaging market.
The segment losses are not a substitute for standalone cash flow, and the figures include depreciation and amortization. A buyer would evaluate normalized earnings, mill and box-plant investments, working capital, restructuring costs and the business’s debt and pension obligations. Investors considering the spinoff would need the same information, plus how much borrowing and corporate expense would move into the independent DS Smith.
What would a sale below $6 billion actually mean?
The reported price is tempting to compare with the roughly $7.2 billion acquisition of DS Smith completed in 2025, but the comparison is imprecise. The proposed EMEA separation contains both legacy DS Smith and legacy International Paper assets in the region, while IP retains former DS Smith assets located in North America. The reported sale figure also lacks a disclosed definition of enterprise versus equity value and any allocation of debt, liabilities or taxes.
For scale, doubling EMEA’s $4.61 billion of first-half sales gives a mechanical annualized revenue figure of $9.22 billion. A hypothetical $6 billion enterprise value would equal about 0.65 times that revenue figure; an offer below $6 billion would imply a lower multiple on the same basis. That calculation is only a reference point: no buyer has disclosed an enterprise value, first-half sales need not represent the next twelve months, and revenue multiples alone cannot resolve the division’s operating losses.
A sale could still be financially attractive if the after-tax proceeds, retained liabilities and avoided separation costs compare favorably with the value investors would place on DS Smith shares. Conversely, selling the business during an earnings trough could transfer any recovery in European packaging profitability to the buyer. Without a price on comparable terms and a more complete standalone balance sheet, neither conclusion is yet supportable.
What IP shareholders should watch next
The November 3 DS Smith capital markets day remains scheduled, giving shareholders a near-term opportunity to examine management’s standalone plan. The presentation should be more useful if it clarifies earnings normalization, cost-saving targets, cash requirements and the capital structure under a spinoff. A competitive sale process could change those decisions or overtake the listing entirely.
There are three developments worth tracking: whether IP receives a firm and financed bid; whether management releases detailed standalone financial and debt figures; and whether it updates the original separation structure, including any retained stake and shareholder distribution. Until a transaction is selected, the EMEA entry in our Upcoming Spinoffs calendar belongs in the conditional category, with a potential sale now explicitly competing against the planned public listing.