updated - October 26, 2020 Monday EDT
Weyerhaeuser Company, one of the world's largest private owners of timberlands, has announced in a press release that it would be acquiring Plum Creek Timber Co.
The combination of the two companies would create the world's premier timber, land and forest products company.
Weyerhaeuser said in the press release that the merger of the two companies would create the largest private ownership of timberland in the U.S.
The combined companies would have more than 13 million acres of diverse, productive forests.
Weyerhaeuser adds in the press release that their combination would Plum Creek would drive the company's performance upward.
This is achieved through shared best practices and economies of scale.
Doyle R. Simons, the president and CEO of Weyerhaeuser, said in the press release that they are excited to combine the two leaders in the industry.
"This new company will create tremendous benefit for shareholders as we drive value through shared best practices, economies of scale, cost synergies, operational excellence and disciplined capital allocation," he said.
Rick Holley, the CEO of Plum Creek, adds in the press release that the combined company offers a "compelling opportunity for shareholders."
"The breadth and diversity of our combined land and timber assets uniquely position the new company to capitalize fully on the improving housing market, continue to capture Higher and Better Use land values across the combined portfolio, and create additional opportunities to build lasting value," he said.
Bloomberg adds that Weyerhaeuser's shares closed at $30.40 on Friday, November 6, 2015.
The Friday closing prices gives Weyerhaeuser a market capitalization of $15.5 billion.
Bloomberg adds that Plum Creek's market capitalization value is at $6.99 billion based on its closing price on Friday, November 6. 2015.
Plum Creek's stock closed at $40.29.
Under the terms of the agreement, Plum Creek shareholders will receive 1.60 shares of Weyerhaeuser for every share of Plum Creek they hold, according to the press release.
Bloomberg adds that the approximate value of the transaction is about $8.4 billion.
Weyerhaeuser adds in the press release that upon the closing of the transaction, Weyerhaeuser shareholders will own approximately 65 percent of the combined company.
Plum Creek shareholders will hold approximately 35 percent of the combined company.
Weyerhaeuser adds in the press release that Holley will serve as the non-executive chairman of Weyerhaeuser's board.
Simons will serve as the president and CEO of the combined company.
Weyerhaeuser said in the press release that they expect the transaction to close on the first quarter or early second quarter of 2016.
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