After eight months of negotiation that had been tempestuous at times, International Paper Co. of Memphis, TN, completed on Feb. 13 a $3.7 billion acquisition of its chief rival, Austin, TX-based corrugated packaging maker Temple-Inland Inc.

A Feb. 10 ruling by the U.S. Justice Department cleared the last obstacles to the merger. The two companies were among the largest producers of corrugated packaging in North America, with Temple-Inland’s annual revenue of $3.8 billion and International Paper’s annual revenue of $25 billion.

Last week, International Paper agreed to sell three of the combined company's containerboard mills over the next four months to satisfy demands from the Justice Department's antitrust division, paving the way for the final merger.

Without the sale of former Temple-Inland facilities in Waverly, TN, and Ontario, CA, and an International Paper mill in Oxnard, CA, or Henderson, KY, the new International Paper would have controlled 37 percent of the North American containerboard market, which "likely would have led International Paper to strategically reduce its output of containerboard in order to increase the market price," the Justice Department wrote in its ruling. The Justice Department must approve the buyer or buyers of the mills.

Temple-Inland's common stock ceased trading on the New York Stock Exchange Monday and closed at $31.99 per share, one penny less than the per-share price International Paper paid for the company. International Paper will also take on between $600-$700 million in Temple-Inland debt as part of the acquisition.

"The combination of International Paper and Temple-Inland strengthens our North American packaging business and enhances our ability to generate cash flow while maintaining our strong balance sheet," John Faraci, International Paper chairman and chief executive officer, said in a written statement. "We look forward to working with the employees of Temple-Inland as we successfully integrate our businesses and create an even-stronger company with substantial benefits for our customers, employees and shareholders."

International Paper has been quiet about its plans for the more-than-10,000 Temple-Inland employees, though securities filings said that the Temple-Inland leadership team would not be retained. Through contraction and elimination of overlapping positions, International Paper expects to trim about $300 million from the annual cost of operating both companies.

Temple-Inland was founded by T.L.L. Temple in Diboll, TX, in 1894 as a lumber company. It grew into a Fortune 500 conglomerate with interests in packaging, lumber, building products, real estate and banking. In 2000, the company moved its headquarters to Austin. In 2007, Temple-Inland spun off its banking and development businesses. It is expected that International Paper will make moves to spin off its former Temple-Inland construction assets.

Temple-Inland shareholders rejected two offers from International Paper, the first in June 2011, before accepting the third and final offer in December.