International Paper to buy 7 pulp mills from Weyerhaeuser
May 4, 2016 by Manufacturing AUTOMATION
May 4, 2016 – International Paper (IP) says it is buying Weyerhaeuser’s pulp business for $2.2 billion. Under the terms of the agreement, IP will acquire five pulp mills (including one in Grande Prairie, Alta.) 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.
The deal is expected to close before the end of the year.
“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.”
The company will get a $300 million tax benefit for the deal, bringing its total cost for the mills down to $1.9 billion.
“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,” said Doyle R. Simons, Weyerhaeuser president and CEO.
Weyerhaeuser’s pulp business has approximately 1900 employees throughout Canada, the U.S., and Poland.
The deal with International Paper does not include Weyerhaeuser’s liquid packaging board facility or newsprint and publishing papers joint-venture, says the company.
— With files from The Associated Press