MEMPHIS, Tenn., May 2, 2016 /PRNewswire/ -- International Paper
(NYSE: IP) announced that it has entered into a definitive
agreement to purchase Weyerhaeuser's pulp business. Under
terms of the agreement, IP will acquire five pulp mills and two
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.
Because the transaction is a purchase of assets, International
Paper expects to realize a tax benefit with an estimated net
present value of approximately $300
million. Including this benefit, the net price is
approximately $1.9 billion.
International Paper forecasts annual synergies of
approximately $175 million by the end
of 2018, which will require the need for one-time costs of
approximately $85 million.
"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 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. (Mississippi,
Georgia, North Carolina), Canada and Poland. The combined business
will provide the company flexibility to manage a wide portfolio of
products to meet customer needs.
The acquisition is expected to close in the 4th quarter of 2016,
subject to certain closing conditions, primarily the receipt of
regulatory approval.
The Company will hold a webcast today at 9:30 a.m. ET / 8:30 a.m.
CT to discuss the announcement. All interested parties are
invited to listen to the webcast live and view the slides to be
presented via the Company's Internet site at
http://www.internationalpaper.com by clicking on the Investors tab
and going to the presentations page. Parties who wish to
participate in the webcast via teleconference may dial (877)
316-2541 within the U.S. only, or +1 (706) 679-8242 for
international callers, and ask to be connected to the International
Paper conference call. The conference ID number is 1208577.
Participants should call in no later than 9:15 a.m. ET / 8:15 a.m.
CT. An audio-only replay will be available for 60 days
following the webcast. To access the replay, dial (855) 859-2056 or
+1 (404) 537-3406, and when prompted for the conference ID, enter
1208577.
International Paper (NYSE: IP) is a global leader in packaging
and paper with manufacturing operations in North America, Europe, Latin
America, Russia,
Asia and North Africa. Its
businesses include industrial and consumer packaging along with
uncoated papers and pulp. Headquartered in Memphis, Tenn., the company employs
approximately 55,000 people and is strategically located in more
than 24 countries serving customers worldwide. International Paper
net sales for 2015 were $22 billion.
For more information about International Paper, its products
and stewardship efforts, visit internationalpaper.com.
Certain statements in this press release may be considered
forward-looking statements. These statements reflect Company
management's current views and are subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in these statements. Factors
which could cause actual results to differ include but are not
limited to: (i) purchase price adjustments; (ii) the receipt of
regulatory approvals for the transaction and the successful
fulfillment or waiver of all other closing conditions without
unexpected delays or conditions; (iii) the successful closing of
the transaction within the estimated timeframe; (iv) the failure to
realize the expected synergies and cost-savings from the
transaction or delay in realization thereof; (v) the successful
financing of the transaction; (vi) increases in interest rates;
(vii) industry conditions, including but not limited to changes in
the cost or availability of raw materials, energy and
transportation costs, competition we face, cyclicality and changes
in consumer preferences, demand and pricing for our products;
(viii) global economic conditions and political changes, including
but not limited to changes in currency exchange rates, the amount
of our future pension funding obligation, changes in tax laws and
pension and health care costs; (ix) unanticipated expenditures
related to the cost of compliance with environmental and other
governmental regulations and to actual or potential litigation; and
(x) other factors that can be found in the Company's press releases
and Securities and Exchange Commission filings. The Company
undertakes no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
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SOURCE International Paper