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Waste & Recycling December 02, 2016 11:00:58 AM

Weyerhaeuser concludes sale of pulp business to International Paper

Paul Ploumis
ScrapMonster Author
The federal regulators had signed off on the deal in August.

Weyerhaeuser concludes sale of pulp business to International Paper

SEATTLE (Scrap Monster): Weyerhaeuser Company has announced completion of sales of its pulp business to International Paper in an all-cash deal of $2.20 billion, subject to post-closing adjustments. The after-tax proceeds are estimated at around $1.60 billion, which will be primarily used for repayment of debts.

The sale was announced earlier during May this year. The federal regulators had signed off on the deal in August. The deal covers five pulps mills located in Columbus, Miss., Flint River, Ga., New Bern, N.C., Port Wentworth, Ga., and Grande Prairie. The deal also covers two converting facilities in Columbus, Miss. and Gdansk, Poland. However, the sale does not include Weyerhaeuser’s other properties in the state, such as its Mississippi-Alabama Timberlands Area Headquarters in Columbus and lumber mills in other parts of the state. 

According to Doyle R. Simons, president and CEO, Weyerhaeuser, the sale is part of the company’s strategic review that initiated in November 2015. The sale of Cellulose Fibers pulp mills is expected to deliver compelling value for company shareholders and represents a significant milestone in its journey to develop itself into the world's premier timber, land, and forest products company.

International Paper Chairman and CEO Mark Sutton stated that the transaction will position the company as the premier global supplier of fluff pulp and help it to generate additional cash flow through superior R&D capabilities. He welcomed the talented employees of Weyerhaeuser to the International Paper family. The addition of the dedicated Weyerhaeuser team to its fold will help the company to offer better services to its customers around the world, Sutton noted. The acquired business has around 2,000 employees around the world. The combined businesses will be reported as a separate business segment under the name Global Cellulose Fibers and will be headed by senior vice president Jean-Michel Ribieras.

As part of the company’s strategic review of its Cellulose Fibres business, Weyerhaeuser had recently signed a definitive agreement with one of the affiliates of One Rock Capital Partners, LLC to sell North Pacific Paper Company (NORPAC)-its printing papers business. This transaction included the printing papers mill located in Longview, Washington, operated through a joint venture with Nippon Paper Industries Co., Ltd.

Also, during early-September this year, the company had announced completion of sale of its liquid packaging board business to Nippon Paper Industries Co., Ltd for $285 million in cash, in accordance with the agreement signed during June this year. The transaction covered one mill located in Longview, Washington.

Weyerhaeuser is one of the world's largest private owners of timberlands. It owns or controls more than 6 million acres of timberlands, primarily in the U.S., and manages another 14 million acres under long-term licenses in Canada.

Headquartered in Memphis, Tennessee, International Paper is a leading global producer of renewable fiber-based packaging, pulp and paper products with manufacturing operations in North America, Latin America, Europe, North Africa, Asia and Russia. It is a leading producer of packaging products that enable world-wide commerce; pulp for diapers, tissue and other personal hygiene products; papers that drive communication; paper bags that carry groceries; and paper cups and food containers.

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