Originally published Tuesday, March 18, 2008 at 12:00 AM
Weyerhaeuser sells containerboard unit for $6 billion
Weyerhaeuser is selling its containerboard unit to International Paper for $6 billion in cash. The sale includes nine containerboard mills...
The Associated Press
Part of the deal
PACIFIC NORTHWEST facilities included in Weyerhaeuser's deal with International Paper:Containerboard mills:
Albany, Ore.
Springfield, Ore.
Packaging locations:
Bellevue
Moses Lake
Olympia
Yakima
Beaverton, Ore.
Portland
Specialty-packaging plants:
Beaverton, Ore,
Hillsboro, Ore.
Salem, Ore.
Kraft bag and sack locations:
Beaverton, Ore.
Recycling facilities:
Kent
Beaverton, Ore.
Eugene, Ore.
Associated Press
MEMPHIS, Tenn. — Weyerhaeuser is selling its containerboard unit to International Paper for $6 billion in cash.
The sale includes nine containerboard mills, 72 packaging locations, 10 specialty-packaging plants, four kraft bag and sack locations and 19 recycling plants.
About 14,300 employees work at the containerboard packaging and recycling business.
Federal Way-based Weyerhaeuser said it plans to use a good part of the sale's proceeds to pay down debt. The company had been considering a sale of the division as it looked to focus on its timber, wood-products and real-estate operations.
International Paper, a global supplier of packaging materials and uncoated paper, said it expects to complete the deal in the third quarter and that it will add to earnings in 2009.
The Memphis, Tenn., company said it will pay for the purchase through increased debt.
International Paper has greatly cut its debt and improved cash flow since launching a major reorganization in 2005 to move from forest products and focus on producing uncoated paper and containerboard.
"This is just the exact reason we paid down $7 billion of debt a couple of years ago ... to keep the financial flexibility so if something came along that was an opportunity for International Paper we could take advantage of it," said John Faraci, International Paper's chairman and chief executive.
The planned purchase, which would make International Paper the largest containerboard producer in North America with a 29 percent market share, drew cautious reactions from market analysts.
The increased debt led Moody's Investors Service to revise its outlook on International Paper to "negative" from "stable."
Goldman Sachs downgraded International Paper to "neutral" from "buy," saying its analysts "view the transaction as relatively expensive and a strategic negative for IP" though they remain positive on the longer-term prospects for the company.
Credit Suisse considered the agreement "good for both in the short run," while noting International Paper is the only containerboard producer "with the balance sheet to take on $6 billion in debt."
Weyerhaeuser shares rose $1.09, or 1.8 percent, to $63.06 Monday, while International Paper shares fell $2.79, or 8.7 percent, to $29.47.
Copyright © 2008 The Seattle Times Company
EU nations' reality: Greece's woes are theirs, too
Greece leads markets higher amid EU rescue hopes
RealNetworks makes key play with Rhapsody spinoff
Alaska Air dropping Jones Soda beverages, going back to Coca-Cola
Lots of Buzz over Google latest bid at social networking

nwautos
Associated Press Study: Fatal crashes down in Washington Last year Washington's roads were the scene of the fewest fatal crashes since 1955. According...
Post a comment
nwjobs
Post a comment
Michelle Goodman blogs about work/life balance.
Five reasons to stick with a job you hate -- for now
Post a comment
- Alaska Air dropping Jones Soda beverages, going back to Coca-Cola
- Man found shot dead in pickup truck in Seattle
- Seattle is first U.S. stop for Picasso exhibit
- Husky Football Blog | Pac-10 expansion to get consideration over next year
- State Senate votes to clear way for tax increases
- Idol Confessions | "American Idol" hopeful from Seattle didn't make it to Hollywood afterall
- Belltown boulevard could be completed by early next year
- Nicole Brodeur | Chrisceda Clemmons' house wasn't the only casualty
- Teen is beaten in bus tunnel; Metro to review policies
- Brier Dudley's Blog | Google rolls its own Facebook & Twitter with Gmail "Buzz"
- Republicans may be no-shows at health-plan summit
277 - State Senate votes to clear way for tax increases
257 - Pac-10 expansion to get consideration over next year
249 - Lee undergoes foot surgery
233 - Obama: GOP and Dems together can spur job growth
213 - Fort Lewis soldier charged with abusing 4-year-old, holding her head in water
193 - Bus-tunnel attack while guards watched prompts review of Metro security
146 - Rivals names Martin one of Pac-10's best recruiters
143 - Belltown boulevard could be completed by early next year
128 - White House mocks Sarah Palin from podium
96
- Seattle is first U.S. stop for Picasso exhibit
- Belltown boulevard could be completed by early next year
- 747-8 soars smoothly on first outing
- Wine Adviser | Oregon's quality pinots join the bargain ranks
- Alaska Air dropping Jones Soda beverages, going back to Coca-Cola
- How clean are those pre-washed salad greens?
- Snap out of your photo funk: How to make sense of all those piles of images
- Answers to biggest Olympic TV questions
- Rick Steves' Europe | What's new in Rome and Venice for 2010
- Brier Dudley's Blog | Google rolls its own Facebook & Twitter with Gmail "Buzz"









