MEMPHIS, TN - This is a news release from International Paper
International Paper (NYSE: IP) announced that it has entered into a definitive agreement to purchase Weyerhaeuser's pulp business. Under terms of the agreement, IP will acquire five pulp mills and two converting facilities that produce fluff pulp, softwood pulp, and specialty pulp for a number of consumer applications including diapers, other hygiene products, tissue, and textiles.
Because the transaction is a purchase of assets, International Paper expects to realize a tax benefit with an estimated net present value of approximately $300 million. Including this benefit, the net price is approximately $1.9 billion. International Paper forecasts annual synergies of approximately $175 million by the end of 2018, which will require the need for one-time costs of approximately $85 million.
"Weyerhaeuser's pulp business has an outstanding customer base served from low-cost, well-run assets that complement our existing system and offers significant synergy opportunities," said International Paper Chairman and CEO Mark Sutton. "This transaction will position us as the premier global supplier of fluff pulp and will enhance our ability to generate additional free cash flow. We look forward to working with the talented employees of Weyerhaeuser as we integrate our businesses and create an even stronger company."
Weyerhaeuser's pulp business has approximately 1900 employees throughout the U.S. (Mississippi, Georgia, North Carolina), Canada and Poland. The combined business will provide the company flexibility to manage a wide portfolio of products to meet customer needs.
The acquisition is expected to close in the 4th quarter of 2016, subject to certain closing conditions, primarily the receipt of regulatory approval.
The Company will hold a webcast today at 9:30 a.m. ET / 8:30 a.m. CT to discuss the announcement. All interested parties are invited to listen to the webcast live and view the slides to be presented via the Company's Internet site at http://www.internationalpaper.com by clicking on the Investors tab and going to the presentations page. Parties who wish to participate in the webcast via teleconference may dial (877) 316-2541 within the U.S. only, or +1 (706) 679-8242 for international callers, and ask to be connected to the International Paper conference call. The conference ID number is 1208577. Participants should call in no later than 9:15 a.m. ET / 8:15 a.m. CT. An audio-only replay will be available for 60 days following the webcast. To access the replay, dial (855) 859-2056 or +1 (404) 537-3406, and when prompted for the conference ID, enter 1208577.