The Justice Department on Friday gave antitrust clearance to the merger of International Paper Co. (IP) and Temple-Inland Inc. (TIN), but the companies agreed to divest three containerboard mills as a condition of government approval.

The Justice Department filed a proposed settlement in a federal court in Washington that requires the companies to sell Temple-Inland's containerboard mills in Waverly, Tenn., and Ontario, Calif. The settlement also requires the divestiture of either International Paper's containerboard mill in Oxnard, Calif., or its mill in Henderson, Ky.

The department said the merger, as originally proposed, would likely have led to higher prices for containerboard and corrugated boxes.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com

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