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Weyerhaeuser and Plum Creek to create $23 billion company

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Staff writer ▼ | November 9, 2015
Weyerhaeuser Company and Plum Creek entered into a definitive agreement to create the timber, land and forest products company with more than 13 million acres of the most productive and diverse timberland in the U.S.
Weyerhaeuser
Merger   The timber, land and forest products company
At closing, the combined company is expected to have an equity value of $23 billion based on current share prices. The combined EBITDA for both companies in 2014 was $2.2 billion.

Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, Plum Creek shareholders will receive 1.60 shares of Weyerhaeuser for each share of Plum Creek held.

This fixed exchange ratio represents an implied premium of 13.8% to the 30-trading-day Volume Weighted Average Price ratio of Plum Creek shares to Weyerhaeuser shares. Following closing, Weyerhaeuser and Plum Creek shareholders will own approximately 65% and 35%, respectively, of the combined company's common stock.

Weyerhaeuser intends to execute a $2.5 billion share repurchase shortly after closing. The repurchase will result in a net financial impact on the company that is as if the deal were structured with approximately 70% stock and 30% cash.

The combined company expects to maintain Weyerhaeuser's current annual dividend of $1.24 per common share, representing a 13% dividend increase to the dividend currently received by Plum Creek shareholders.


 

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