Plum Creek agrees to $8 billion merger deal
Plum Creek will soon be no more.
Plum Creek Timber Co. and Weyerhaeuser announced Sunday the two companies would merge, creating the largest private owner of timberlands in the U.S. with more than 13 million acres in timber and other land holdings.
Under the terms of the $8 billion merger agreement, which has been unanimously approved by the boards of directors of both companies, Plum Creek shareholders will receive 1.6 shares of Weyerhaeuser for each share of Plum Creek stock. The transaction is contingent on shareholder approval. The merged company will be called Weyerhaeuser.
Combined, the two companies will have a equity value of $23 billion based on current share prices. Plum Creek owns 6 million acres of timberlands in 19 states, including 770,000 acres in Montana.
Weyerhaeuser owns or controls nearly 7 million acres of timberlands, primarily in the U.S., and manages additional timberlands under long-term licenses in Canada. Weyerhaeuser also has 30 manufacturing facilities worldwide.
Locally, Plum Creek employs about 750 workers in the Flathead Valley, with 623 in manufacturing. The bulk of its employees work in Columbia Falls, with an annual payroll of about $60 million. Weyerhaeuser has about 12,800 employees worldwide and had $7.4 billion in sales in 2014.
Plum Creek CEO Rick Holley will remain with the company as non-executive chairman of Weyerhaeuser’s board, while Doyle R. Simons, currently the president and chief executive officer of Weyerhaeuser, will remain CEO of the combined company. The merger is expected to close in late first quarter or early second quarter of 2016.
Until the deal closes, “it’s business as usual,” said Plum Creek spokeswoman Kathy Budinick.
During a conference call Monday morning, both Simons and Holley spoke to the merger.
Simons noted the merged company would now have a strong land base and manufacturing base. While neither executive made comments directly to the future of Montana’s mills, the tone of the conversation certainly seemed positive.
“We’ll be really well positioned to capitalize on the housing market,” Simons noted.
Simons said the company didn’t anticipate any regulatory issues with the merger.
The company does expect to realize about $100 million in what it termed “synergy” from the merger — cost savings.
Over the past several years Plum Creek has become a land company as much as a timber company. In 2008 it sold 310,000 acres of land in the Swan Valley in a $500 million deal brokered by the Nature Conservancy. In 2014, it sold another 117,000 acres to the Conservancy in the Blackfoot and lower Swan Valleys. Today, the land, in separate parcels, is owned either by the Forest Service, the state, and the Conservancy.