After 14 months of pursuit and resistance, Weyerhaeuser Company and Willamette Industries, Inc., found a price they could agree on, and announced on January 28 that they signed a "definitive merger agreement" under which Weyerhaeuser will acquire all the outstanding shares of Willamette for $55.50 per share in cash.

The transaction will have a total equity value of approximately $6.2 billion. Weyerhaeuser will also assume approximately $1.7 billion of Willamette debt, giving the sale a total consideration of $7.9 billion, according to a simultaneous joint news statement released by the companies from their West Coast headquarters. Weyerhaeuser is based at Federal Way, a suburb of Seattle, Washington, and Willamette's home base is Portland, Oregon, just over two hours drive time away.

Both companies own, manage, and operate major forest land holdings, manufacturing, and sales enterprises in the South, including Arkansas and Louisiana, and both own and operate major manufacturing and sales enterprises across the U.S. and worldwide.

Company officials said the transaction is expected to be completed fairly quickly, with much of the preliminary legal work already prepared during the months of negotiation.

The companies said in their news statement that Weyerhaeuser's wholly-owned subsidiary, Company Holdings, Inc., increased the purchase offer to $55.50, after which Willamette broke off its discussions for purchase of the Georgia-Pacific building materials group, and voted unanimously to approve the offer, and recommended its shareholders tender their shares.

Bruce Amundson, Weyerhaeuser media spokesman, said that shares offered under the revised offer of $55.50 per share will be redeemed after the February 8 deadline. Owners of any shares not tendered by the deadline will be given the right to receive the same cash price paid in the tender offer.

It is anticipated that the formal acquisition will be completed in the early spring of this year, Amundson said. Transition teams are already being formed to begin actual integration of operations of the two companies "as quickly as they can," within 12 months.

Weyerhaeuser's administrative headquarters for the Southern region is at Hot Springs, Arkansas, with other offices in Little Rock, Amundson said. The company has a few over 2,500 employees in its Louisiana and Arkansas forestry and manufacturing operations, with about 75 percent of those in Arkansas.

In Arkansas, Weyerhaeuser operates a total landholding of 714,000 acres. Manufacturing includes two softwood lumber mills, two plywood mills, hardwood lumber mill, and two tree nurseries.

Louisiana operations include 355,000 acres of timberland, tree nurseries, a sawmill at Holden, a containerboard plant in Shreveport, and a plant of the TrusJoist division at Natchitoches.

The Willamette corporate name "will disappear," Amundson said, early in the process sometime after the actual purchase is completed, although it is anticipated that several of the company's branded paper products will continue to carry the Willamette name.

Weyerhaeuser owns 24.3 million acres of forest lands in the U.S. and Canada. The company manages under SFI certification rules, and expects to have all its lands certified by the end of 2002.

Willamette's southern region headquarters is located at Ruston, Louisiana. The company owns and manages over 700,000 acres of forest land in Louisiana and Arkansas, with sawmill, plywood, paper, laminated beams, and laminated veneer lumber plants in the two states. In Louisiana, the company operates landowner assistance offices at Arcadia and Natchitoches, with forestry and logging operations at Dodson.

Contacted at his Ruston office, Willamette's Southern Region vice president Wayne Parker said he and the Willamette personnel are "ready to shift gears and make the new company successful."

Parker praised the Willamette personnel for their loyal service, and said he expects to welcome the transition teams to show them the local area operations are "well managed, profitable, and they will want to keep them in place."

In announcing the acquisition agreement, Steven Rogel, chairman, president, and CEO of Weyerhaeuser, said, "We are very excited about the combination of Willamette and Weyerhaeuser, which will create the premier forest products company - headquartered in the Pacific Northwest. A combination of Weyerhaeuser and Willamette creates a company with high quality management and assets focused in complementary products. We will benefit from sharing the best practices of two industry leaders. The transaction will strengthen our core businesses by enhancing our leadership in containerboard packaging, uncoated free sheet, building material businesses, and timberlands."

Rogel, who formerly was CEO of Willamette until moving to Weyerhaeuser five years ago, said, "I have had the privilege of working with employees of both companies and I am confident that we will be able to successfully integrate and build a stronger, more efficient company. Employees of both companies care deeply about their customers, their fellow workers, and the communities in which they live. The high importance Willamette places on those values is one of the many reasons why we believe Weyerhaeuser and Willamette are a great fit."

Weyerhaeuser Company, one of the world's largest integrated forest products companies, was incorporated in 1900. In 2001, sales were $14.5 billion. It has offices and operations in 17 countries, with customers worldwide.

Willamette Industries is an integrated forest products company with 106 plants located in the U.S., France, Ireland, and Mexico. The company owns 1.7 million acres of timber land in the U.S. and manages it sustainably to produce building materials, composite wood panels, fine paper, office paper products, and corrugated packaging and grocery bags.

William Swindells, chairman of the Willamette board, said "After careful consideration of our strategic alternatives, our board has decided that accepting Weyerhaeuser's revised offer is in the best interests of our shareholders. We believe Willamette's track record of delivering shareholder value is second to none in the industry, due largely to the tremendous dedication of our employees. We expect that they will have much to contribute to Weyerhaeuser's future success."

Back