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ACQUISITION: WEYERHAEUSER BIDS $3.6 BILLION FOR MACBLO


July 1, 1999
By Pulp & Paper Canada

VANCOUVER, BC — Weyerhaeuser Co. of Federal Way, WA, has made a $3.6-billion offer for MacMillan Bloedel Ltd. If the deal goes through, the merged company would become the largest forest-products com…

VANCOUVER, BC — Weyerhaeuser Co. of Federal Way, WA, has made a $3.6-billion offer for MacMillan Bloedel Ltd. If the deal goes through, the merged company would become the largest forest-products company in Canada and the third-largest in North America. The two companies will create a lumber powerhouse with annual sales of $19.5 billion. Gone will be the MacBlo name, which dates to 1919, although there is some speculation that the name will live on as a product line. Tom Stephens, president and chief executive officer of MacBlo, said he will leave once the takeover is complete, considering a teaching career, among other pursuits. The deal is subject to review by the federal Competition Bureau and Industry Minister John Manley. BC Premier Glen Clark welcomed the deal, but said his government would take a close look to consider all ramifications. MacBlo has 9500 employees, 5500 of them in Canada. Its 1998 sales were $4.18 billion, and it showed a profit of $42 million. If the deal falls through, Weyerhaeuser will receive a $92-million breakup fee.

WOOD-FREE PAPER: CDN FIRM GAINS CONTRACT IN CHINA

MONTREAL, QC — SNC-Lavalin Group — the largest industrial contractor and consulting firm in Canada and the fourth largest in the world – has been awarded a contract as a technical advisor for the $86-million (US) joint venture between Far East Pulp & Paper Limited of Hong Kong and Fengshun Mountain Region Resources Head Company of Guangdong, China. Under the terms of the agreement, the joint-venture company will develop and operate a 150 000-tonne-per-year (t/y) wood-free pulp and paper mill in Fengshun County, north east of Guangdong Province. This new green mill will draw on the abundant wild bamboo in the Fengshun mountain region. “The new Fengshun paper mill not only provides a solution to tree preservation, but will also help to establish Fengshun as an industrial base for papermaking using natural and renewable resources,” said Sam Leung, Far East’s chairman.

Current world paper consumption is about 300 Mt, with China’s consumption equaling 29 Mt. On a per capita basis, China consumes 50% less paper than the world average of about 55 kg.

ENVIRONMENT: ALBERTA’S EFFLUENT RATES ARE DROPPING

EDMONTON, AB — An industry group said that Alberta pulp mills are increasing pulp and paper production, but not at the expense of the environment.

Provincial government statistics indicate Alberta pulp and paper mills have steadily increased production since 1990, while decreasing the average daily loading rates for all commonly measured effluent parameters – including absorbable organic halogen (AOX), total suspended solids (TSS), and biochemical oxygen demand (BOD). “Our pulp and paper members have achieved this success by investing in the best available technology and by continually improving mill facilities and environmental monitoring techniques,” said Neil Shelly, director of environmental affairs for Alberta Forest Products Association. For example, from 1990-98, daily pulp production increased by almost 120%, yet BOD dropped 45%.

ACQUISITION: ALLIEDSIGNAL BUYS HONEYWELL FOR $13.8 BILLION (US)

MORRIS TOWNSHIP, NJ — AlliedSignal Inc. has agreed to acquire Minneapolis-based Honeywell Inc. in a stock deal valued at $13.8-billion (US), creating an aerospace parts-and-electronics giant that would be one of the largest US industrial conglomerates. The combined company would have revenues of about $25 billion (US) in 1999. Aerospace operations would account for about 40% of the new company’s revenue, and the rest would come from auto parts, specialty chemicals, plastics and electronic controls from manufacturing processes. For example, Honeywell-Measurex Inc. makes control systems for pulp and paper producers.

In the deal, Honeywell chairman Michael Bonsignore, 58, would become chief executive officer of the combined company, while AlliedSignal’s Lawrence Bossidy, 64, would remain chairman until he retires in April 2000. The combined company will be named Honeywell, but will be headquartered in AlliedSignal’s hometown of Morris Township, NJ. Analysts speculate that the deal will draw scrutiny from antitrust regulators in the US and Europe, and consequently, the company might have to sell some parts of the business. About 4500 jobs, or 3.6% of a combined workforce, would be eliminated as a result of the acquisition. Directors of both companies have approved the deal.

BRIEFLY

The Canadian newsprint industry operated at 95% of capacity in April, compared to 90% for April 1998. Total Canadian shipments rose 7%, according to CPPA. Sales to the US and overseas markets rose 3.1% and 15.3% respectively. Inventories reached 474 000 tonnes, up 13,000 t over March.

Bowater Inc. of Greenville, SC, is selling its Great Northern Paper Inc. unit to Inexcon Maine Inc., an investment group based in Trois-Rivires, QC. Great Northern operates pulp and paper mills in Maine that produce 550 000 tons per year of newsprint, directory and specialty grades. The mills employ 1500.

WOOD-FREE PAPER: CDN FIRM GAINS CONTRACT IN CHINA

MONTREAL, QC — SNC-Lavalin Group — the largest industrial contractor and consulting firm in Canada and the fourth largest in the world – has been awarded a contract as a technical advisor for the $86-million (US) joint venture between Far East Pulp & Paper Limited of Hong Kong and Fengshun Mountain Region Resources Head Company of Guangdong, China. Under the terms of the agreement, the joint-venture company will develop and operate a 150 000-tonne-per-year (t/y) wood-free pulp and paper mill in Fengshun County, north east of Guangdong Province. This new green mill will draw on the abundant wild bamboo in the Fengshun mountain region. “The new Fengshun paper mill not only provides a solution to tree preservation, but will also help to establish Fengshun as an industrial base for papermaking using natural and renewable resources,” said Sam Leung, Far East’s chairman.

Current world paper consumption is about 300 Mt, with China’s consumption equaling 29 Mt. On a per capita basis, China consumes 50% less paper than the world average of about 55 kg.

ACQUISITION: ALLIEDSIGNAL BUYS HONEYWELL FOR $13.8 BILLION (US)

MORRIS TOWNSHIP, NJ — AlliedSignal Inc. has agreed to acquire Minneapolis-based Honeywell Inc. in a stock deal valued at $13.8-billion (US), creating an aerospace parts-and-electronics giant that would be one of the largest US industrial conglomerates. The combined company would have revenues of about $25 billion (US) in 1999. Aerospace operations would account for about 40% of the new company’s revenue, and the rest would come from auto parts, specialty chemicals, plastics and electronic controls from manufacturing processes. For example, Honeywell-Measurex Inc. makes control systems for pulp and paper producers.

In the deal, Honeywell chairman Michael Bonsignore, 58, would become chief executive officer of the combined company, while AlliedSignal’s Lawrence Bossidy, 64, would remain chairman until he retires in April 2000. The combined company will be named Honeywell, but will be headquartered in AlliedSignal’s hometown of Morris Township, NJ. Analysts speculate that the deal will draw scrutiny from antitrust regulators in the US and Europe, and consequently, the company might have to sell some parts of the business. About 4500 jobs, or 3.6% of a combined workforce, would be eliminated as a result of the acquisition. Directors of both companies have approved the deal.


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