International Paper, which is closing its Franklin mill, says its board of directors approved an increase in its quarterly common stock dividend from 2.5 cents per share to 12.5 cents per share, effective for the dividend payable June 15 to shareholders of record on May 17.

“The dividend increase reflects improving global economic conditions, increasing demand for IP’s products and our outlook for free cash flow,” said John Faraci, chairman and chief executive officer for International Paper. “The dividend increase is also an important component of creating value for our shareholders.”

In other matters, International Paper has agreed to purchase SCA’s packaging business in Asia for $200 million. International Paper expects to complete the purchase in the second quarter of 2010, subject to regulatory approval of the transaction in China.

“We’re buying good facilities at a good price as well as gaining an excellent team of 4,500 employees,” said Paul Brown, president of IP Asia. “SCA’s facilities complement our existing converting system of 12 corrugated box plants, which are principally in China.The combination strengthens our packaging business in Asia and will make it more competitive, more profitable and better able to serve customers.”

The SCA packaging business in Asia, which is primarily in China, consists of 13 corrugated box plants and two specialty packaging facilities.