OREANDA-NEWS. International Paper (NYSE: IP) and Ilim Holding announced that they have applied to the Russian Federal Antimonopoly Service (FAS) for approval of the acquisition of rights that will allow the two companies to jointly make decisions regarding the enterprises owned by Ilim Holding SA in Russia.

Obtaining FAS approval presents the next stage toward establishing a joint venture between International Paper and Ilim Pulp. On Oct. 25, 2006, the two companies signed a letter of intent to form the 50-50 joint venture. The joint venture would be established by International Paper purchasing a 50 percent interest in Ilim Holding's stock. The companies intend to close the deal by the end of the second quarter.

Ilim Holding operates the three largest Russian pulp-and-paper mills in European Russia and Siberia, and owns a majority share in St. Petersburg KPK in the Leningrad region.

Ilim is in the process of consolidating ownership of the mills into a Russian open joint-stock company, Ilim Group, a subsidiary of Ilim Holding. Ilim Group will be managed jointly by a board of directors comprising representatives of Ilim Pulp and International Paper. The new company will be headquartered in St. Petersburg.