The president and chief executive of Weyerhaeuser, Doyle R. Simons, will be president and CEO of the combined company and Plum Creek CEO Rick R. Holley will serve as a non-executive chairman.
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The new company will keep the Weyerhaeuser name.
Weyerhaeuser and Plum Creek, two timber owning enterprises deeply rooted in the Pacific Northwest, are merging to form what they call “the world’s premier timber, land and forest product company”. The boards of both companies have unanimously backed the merger.
After the deal closes Weyerhauser shareholders will own 65 percent of the combined company, and Seattle-based Plum Creek shareholders 35 percent.
The transaction could amount to about $8.4 billion based on about 174 million Plum Creek shares outstanding and Weyerhaeuser’s closing price of $30.40 on Friday.
The combined company expects to maintain Weyerhaeuser’s current annual dividend of $1.24 per common share, and the companies anticipate a $2.5 billion post-closing share repurchase. It will manage more than 13mlnn acres of timberland that will allow it to drive economies of scale and capitalize on the USA housing recovery.
Under the terms of the agreement, Plum Creek shareholders will receive 1.60 shares of Weyerhaeuser for every share of Plum Creek they hold, according to the press release.
“I am very pleased to confirm that Weyerhaeuser shares Plum Creek’s enthusiasm and commitment to the Envision Alachua project and to achieving the many public benefits the project will provide to the community”. Our dedicated project team will remain in place and the process will continue as planned without disruption, ” Todd Powell, general manager of Real Estate for Plum Creek said in an email to The Sunday. Earlier this year, the company pledged to sell or spin off $500 billion worth of global financial assets.
Weyerhaeuser said in a separate statement that it will review alternatives for its cellulose fibers business that include holding on to it, a sale or a spinoff.
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Seattle-based Plum Creek owns about 6.2 million acres of timberlands located in over 19 states.
