Two timber companies with deep roots in the Pacific Northwest, Weyerhaeuser and Plum Creek Timber Co., announced plans Sunday to merge to form one of the largest forest product companies in the United States.
Weyerhaeuser will buy Plum Creek Timber Co. for $8.4 billion and the combined companies will hold more than 13 million acres of timberland across the United States, including in Northwest Montana where Plum Creek operates mills in Columbia Falls and Evergreen.
In a press release, Plum Creek and Weyerhaeuser officials say the combined company would be worth more than $23 billion and be “the world’s premier timber, land and forest products company.” Officials say the sale would close early next spring and the companies would operate under the Weyerhaeuser name. Officials said the merger will result in about $100 million in annual savings.
Plum Creek has more than 1,200 employees across the country. Weyerhaeuser employees more than 12,800 people worldwide.
“With an extraordinary set of combined assets and the proven value creation records of both Weyerhaeuser and Plum Creek, the combined company will offer a compelling opportunity for shareholders,” said Rick R. Holley, chief executive officer for Plum Creek. “These two companies are already best-in-class timberland managers with a relentless focus on sustainable resource management. The breadth and diversity of our combined land and timber assets uniquely position the new company to capitalize fully on the improving housing market, continue to capture Higher and Better Use land values across the combined portfolio, and create additional opportunities to build lasting value”
Under the terms of the agreement, Plum Creek shareholders will receive 1.6 shares of Weyerhaeuser for each Plum Creek share held. Following the closing, Weyerhaeuser shareholders would own about 65 percent of the company and Plum Creek shareholders would own 35 percent.
“We’re excited to combine the two leaders in our industry to create the world’s premier timber, land and forest products company,” said Doyle R. Simons, president and chief executive officer of Weyerhaeuser. “This new company will create tremendous benefit for shareholders as we drive value through shared best practices, economies of scale, cost synergies, operational excellence and disciplined capital allocation. Our customers and employees will also benefit as we form a winning team with common values and unparalleled expertise in timber, land and manufacturing.”