Temple-Inland Shares Surged: What You Need to Know

What: Shares of shipping-box manufacturer Temple-Inland (NYS: TIN) soared 25% in intraday trading Tuesday after International Paper (NYS: IP) agreed to acquire it for $3.7 billion.

So what: International Paper raised its bid for Temple-Inland by about 5%, ending a battle for control that lasted more than three months. According to CEO John Faraci, the deal should grow International Paper's share of the corrugated-packaging market from 27% to about 37%.

Now what: While Temple-Inland is pretty much all popped out, International Paper is worth looking into. In addition to the sizable market share gain, the deal is also expected to yield synergies of roughly $300 million per year within the first two years of closing. More importantly, given how positively International Paper's own stock is reacting today, the price for Temple-Inland seems more than reasonable.

Interested in more info onInternational Paper?Add it to your watchlist.

At the time thisarticle was published We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.