Forest products company Weyerhaeuser Co. (WY) agreed Sunday to acquire Longview Timber LLC from Canadian property manager Brookfield Asset Management, Inc. (BAM, BAM-A.TO) for $2.65 billion, including assumed debt. The deal is expected to close in July 2013.
The company also appointed Doyle Simons as the new president and chief executive officer, effective August 1, 2013. Simons will succeed Dan Fulton, who has been at the helm since early 2008 and is now retiring. Fulton was also president and CEO of Weyerhaeuser Real Estate Co. from 2001 to 2008.
The company noted that Simons will be engaged as CEO Elect effective immediately, and that Fulton will, effective August 1, serve as executive vice chairman until his retirement in October 2013.
Simons, aged 49, is already a director of the company since June 2012. He served as CEO and chairman of Temple-Inland from 2008 until February 2012 when it was acquired by International Paper Company. Prior to that role, he held a number of senior management positions with Temple-Inland, which he joined in 1992. Earlier, he practiced real estate and banking law with Hutcheson and Grundy, L.L.P.
Longview Timber consists of about 645,000 acres of high quality timberlands in the U.S. Pacific Northwest. Weyerhaeuser said the timberlands are highly complementary to it existing acreage in Washington and Oregon, and will help leverage its infrastructure as well as expertise in silviculture, logistics and marketing, giving it a distinct competitive advantage both domestically and with export markets.
The deal will expand Weyerhaeuser's timber holdings in the Pacific Northwest by 33 percent to about 2.6 million acres and increase the total amount of U.S. timberlands it owns or controls to about 6.6 million acres.
In conjunction with the deal, Weyerhaeuser intends to raise about $2.45 billion in a combination of debt and equity. The company has a committed senior unsecured bridge facility from Morgan Stanley (MS).
The deal is expected to be immediately accretive to Weyerhaeuser's funds available for distribution per share. The company also intends to increase its quarterly dividend for the third quarter to $0.22 per share from $0.20 per share, payable in September.
Following the repayment of debt and distribution of proceeds to private fund investors, Brookfield expects net cash proceeds of about $600 million from the deal. Weyerhaeuser said it expects the cash flows and synergies from the acquisition to enhance its ability to increase its dividend further in the future.
Separately, Weyerhaeuser announced that its board has authorized the exploration of strategic alternatives with respect to Weyerhaeuser Real Estate Company, or WRECO. The board intends to consider a broad range of alternatives including a merger, sale or spin-off of the business.
Meanwhile, Brookfield also agreed to sell Longview Fibre Paper and Packaging to KapStone Paper and Packaging Corp. (KS) for $1.025 billion. Following the repayment of debt and distribution of proceeds to the other investors in the fund, Brookfield expects net cash proceeds of about $250 million from the deal.
Longview Fibre Paper and Packaging operates a large integrated paper mill at Longview Washington and seven container plants in the U.S. Pacific Northwest, producing Kraft paper, container board and corrugated boxes.
In addition, Brookfield Infrastructure (BIP, BIP.UN.TO) will receive net proceeds of about $470 million from the sale of its interest in its U.S. Pacific Northwest timberland operations for about $790 million, including about $320 million in assumed debt. The deal is expected to be completed in July 2013. Brookfield Infrastructure also completed the sale of the remainder of its Canadian BC Coastal timberland operations on June 7 for net proceeds of about $170 million.
Brookfield Infrastructure said it will generate total proceeds of about $640 million from both deals and will not hold any timberland assets. It will seek to re-invest the proceeds at its targeted, after-tax return on equity of 12 to 15 percent per annum, the company added.
WY closed Friday's regular trading session at $28.29, down $0.32 or 1.12% on a volume of 3.65 million shares, and BAM closed at $35.37, down $0.21 or 0.59% on a volume of 0.57 million shares.
Meanwhile, BIP closed at $36.08, up $0.71 or 2.01% on a volume of 0.32 million shares, and KS closed at $38.09, up $1.59 or 4.36% on a volume of 0.36 million shares.
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December 19, 2025 15:10 ET U.S. inflation data and interest rate decisions by major central banks were the highlights of this busy week for economics news flow. Employment data and survey results on the housing markets also gained attention in the U.S. In Europe, the European Central Bank and Bank of England announced their policy decisions and macroeconomic projections.