Plum Creek Shareholders Approve Merger with Weyerhaeuser

Roughly 99 percent of Plum Creek shareholders voted in favor of adopting the merger agreement

By Dillon Tabish
Plum Creek's mill in Evergreen in 2009. Beacon File Photo.

Shareholders approved the proposed merger of Plum Creek Timber Company and Weyerhaeuser at separate meetings on Friday, moving forward a major deal between two timber giants.

At a special meeting in Seattle, 99 percent of the shares voted were in favor, representing about 70 percent of the shares outstanding, according to a company press release.

At a similar meeting in Federal Way, Washington, more than 98 percent of the shares voting at Weyerhaeuser were in favor of the proposal.

After the merger becomes effective, Plum Creek common stockholders will receive 1.60 Weyerhaeuser common shares for each share of Plum Creek common stock. The merger is expected to become effective before the end of the first quarter of 2016. The dividend will be payable on March 18.

The merger will mark a new era in timber management in Montana. Plum Creek essentially built its empire from Columbia Falls, starting in the 1940s, when D.C. Dunham moved his small upstart lumber business to the Flathead Valley and opened a sawmill. He renamed the company Plum Creek after a small stream in his home state of Minnesota, and over the next 30 years two more plants were built locally as the company developed into a real estate and timber giant.

Now Weyerhaeuser is acquiring Plum Creek for $8.4 billion, creating the nation’s largest private owner of timberland with more than 13 million acres across the U.S. The new company will operate as Weyerhaeuser, a Seattle-based giant on its own right.

Weyerhaeuser generated $7.1 billion in net sales with $533 million in earnings in 2015. The company employs approximately 12,600 people.

On Thursday, Plum Creek officials informed employees that the manufacturing operations and public access policy will be preserved in Northwest Montana but some top-level administrative positions are being eliminated in Columbia Falls.

Plum Creek, which operates stud and plywood mills in Evergreen and plywood and medium density fiberboard plants in Columbia Falls while also overseeing forestry, real estate and land sales across the state, employs 759 people in Montana, 633 of whom are employed by the manufacturing division.

Plum Creek earnings for 2015 hit $197 million on revenues of $1.45 billion. The results include $8 million of merger expenses. In 2014, the company earned $214 million on revenues of $1.48 billion.

As part of the merger announcement in early November, Weyerhaeuser said it had set a target of $100 million in cutbacks, or “synergies,” that would likely come from corporate overhead and regional overhead where there is overlap between the two companies.

Officials declined to speculate how many administrative positions could be lost locally.

Todd Morgan, director of forest industry research at the Bureau of Business and Economic Research at the University of Montana, described the news of possible layoffs as unfortunate but not unexpected.

“Some of that they probably see as redundancies between the two companies that they want to eliminate,” Morgan said. “I think it’s good news about the manufacturing facilities and maintaining the access to the lands. It’s a mixed message, but I think it’s what a lot of people were expecting.”

Correction (Feb.13): A previous version of this story incorrectly characterized the Plum Creek shareholder vote as 70 percent of shares voting in favor with 99 percent represented. Plum Creek said 99 percent of the shares voted were in favor, representing about 70 percent of the shares outstanding.

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