One of the world’s largest recycling operations has been sold by Weyerhaeuser Company (NYSE: WY) as part of a $6 billion deal.
Weyerhaeuser announced the sale of its Containerboard Packaging and Recycling (CBPR) business to International Paper (NYSE: IP) for $6 billion in cash, subject to post closing adjustments. Weyerhaeuser said it expects to use a substantial portion of the after-tax proceeds from the sale to pay down debt.
The transaction includes nine containerboard mills, 72 packaging locations, 10 specialty-packaging plants, four kraft bag and sack locations and 19 recycling facilities. The transaction affects approximately 14,300 employees.
Steven R. Rogel, chairman and CEO of Weyerhaeuser, said the announcement completes the company’s strategic review of the CBPR business.
"We are pleased with the outcome and we will continue to focus on those areas that present the greatest opportunities for the future," Rogel said. "This future begins with the trees and the land, and our outstanding stewardship of these resources. To this we add our unique expertise in growing and extracting value from the trees and the land on which they grow.
The transaction is currently expected to close in the second half of 2008. International Paper has committed financing for the entire purchase price.
Morgan Stanley acted as financial advisor to Weyerhaeuser in the transaction.
Weyerhaeuser Company, one of the world’s largest forest products companies, had 2007 sales of $16.3 billion. It has offices or operations in 13 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities.
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