International Paper Co. (IP) won the federal Justice Department's clearance to acquire Temple-Inland Inc. after promising to divest two Temple-Inland faciities and an IP plant, the two companies announced Friday.

The pulp, paper, and timber companies committed to the divestitures in a consent degree filed in federal court. That action cleared a major roadblock that had held up the deal since it was announced last September. News reports then said IP was paying $32 per share of Temple-Inland stock plus assumption of the company's $600 million debt, thus making the deal worth roughly $4.3 billion.

The consent decree calls for IP and Temple-Inland to divest, within four months following their merger, roughly 970,000 tons of containerboard mill capacity houses at Temple-Inland facilities in Ontario, Calif., and New Johnsonville, Tenn., as well as at the IP plant in Hueneme, Calif. If it needs more time to shed the facilities, IP can get up to two 30-day extensions.

"We are pleased to have reached an agreement with the [Justice Department] that addresses their concerns and preserves the value in the combination of these two fine companies," IP chairman and CEO John Faraci said. "As we take the final steps to closing, we look forward to a smooth integration and to realizing the substantial benefits this transaction provides our customers, employees and shareholders."

IP is solely engaged in paper and packaging. Temple-Inland gets more than four-fifths of its revenues and all of its profits from corrugated packaging; the rest comes from building products.

IP figures the new combination will produce synergies in operations, freight logistics, selling expense, and overhead worth $300 million in the first two years after the firms come together.