Weyerhaeuser Co. concluded to buy Plum Creek Timber Co. for about $8.4 billion to emanate a genuine estate investment trust that will be a largest private owners of country in a U.S.
Plum Creek stockholders will get 1.6 shares of Weyerhaeuser for any share they own, a companies pronounced in a matter Sunday. The understanding carries a 21 percent reward to Plum Creek’s shutting cost on Friday. Federal Way, Washington-based Weyerhaeuser skeleton a $2.5 billion batch buyback shortly after a execution of a deal, that is approaching late in a initial entertain of subsequent year or early in a second quarter.
The new association will possess some-more than 13 million acres (5.3 million hectares) of country opposite a U.S. and furnish lumber and wood-fiber play used in construction. The companies pronounced a partnership will save $100 million of costs any year. Weyerhaeuser Chief Executive Officer Doyle Simons will keep a pretension in a total association while Plum Creek CEO Rick Holley will be non-executive chairman.
“We saw a singular event to mix a dual attention leaders,” Simons pronounced in a write interview.
Weyerhaeuser pronounced in a apart matter that it will examination alternatives for a cellulose fibers business that embody holding on to it, a sale or a spinoff. The unit, that accounted for 26 percent of association revenues final year, creates tender materials used in textiles, paper and diapers.
The merger of Seattle-based Plum Creek needs a capitulation of both companies’ shareholders. Weyerhaeuser expects to say a stream dividend, representing a 13 percent boost to a payout now enjoyed by Plum Creek shareholders, a companies said.
Plum Creek’s shares sealed on Friday during $40.29, giving it a marketplace value of $6.99 billion. Weyerhaeuser sealed during $30.40, for a marketplace capitalization of about $15.5 billion.
Weyerhaeuser’s financial confidant on a takeover is Morgan Stanley and a authorised warn is Cravath, Swaine Moore LLP. Plum Creek’s financial advisers are Goldman Sachs Group Inc. and Bank of America Corp., while authorised warn is Skadden, Arps, Slate, Meagher Flom LLP.