Weyerhaeuser is planning to sell its Cellulose Fibers pulp mills – including the site in Grande Prairie, Alta. – to International Paper for US$2.2 billion in cash.
The transaction includes four other pulp mills, located in Columbus, Miss.; Flint River, Ga.; New Bern, N.C., and Port Wentworth, Ga., with a combined total capacity of nearly 1.9 million tonnes. The sale also includes two modified fiber mills in Columbus, Miss. and Gdansk, Poland.
IP will acquire mills and 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.
“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’s 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., Canada and Poland. IP says the combined business will provide flexibility to manage a wide portfolio of products to meet customer needs.
International Paper’s businesses include industrial and consumer packaging along with uncoated papers and pulp. The company employs approximately 55,000 people and has locations in more than 24 countries.
The transaction with International Paper does not include Weyerhaeuser’s liquid packaging board facility or newsprint and publishing papers joint-venture. Weyerhaeuser’s review of those assets is ongoing.
“I want to thank the employees of the Cellulose Fibers pulp mills for continuing to operate safely, and for delivering an exceptional customer experience throughout the strategic review process,” said Doyle R. Simons, president and chief executive office. “Our mills are world class producers of pulp, and the assets and people are among the finest in the industry. This transaction will position the mills to achieve their full potential as part of an industry-leading pulp and paper manufacturer.”
The transaction is subject to customary closing conditions including regulatory review and is expected to close in the fourth quarter of 2016. The Weyerhaeuser pulp business and International Paper will continue to operate separately until the transaction closes.
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