June 16 Brookfield Asset Management Inc
said it will sell its Longview Timber holdings in the
U.S. Pacific Northwest to Weyerhaeuser Co for $2.65
billion, including assumption of debt, and will sell a nearby
paper and packaging business to KapStone Paper and Packaging
Corp for $1.025 billion.
Brookfield's Longview Fibre Paper and Packaging operations
include a large paper mill in Longview, Washington and seven
container plants in the region that produce Kraft paper,
container board and corrugated boxes. Brookfield said it expects
net proceeds from that transaction of about $250 million, after
repaying debt and distributions to other investors.
"While the timing of the (separate) sale transactions is
coincidental, for investors in our funds these transactions
represent monetization at excellent returns and puts each of
these assets into the hands of strategic buyers who will be able
to take them to the next level," Cyrus Madon, Senior Managing
Partner in Brookfield's Private Equity Group, said in a release
The Longview Timber parcel includes 645,000 acres in
California and Washington that are contiguous with existing
timberlands owned by Weyerhaeuser, which is based in Federal
"This transaction will expand Weyerhaeuser's timber holdings
in the Pacific Northwest by 33 percent to approximately 2.6
million acres and increase the total amount of U.S. timberlands
it owns or controls to approximately 6.6 million acres,"
It said the timber acquisition should immediately boost
company earnings, and that Weyerhaeuser intends to boost its
quarterly dividend to 22 cents per share, from 20 cents per
share, beginning with the third-quarter dividend that is payable
Weyerhaeuser, in separate releases on Sunday, said its board
had elected Doyle Simons president and chief executive officer,
effective August 1, to replace soon-retiring Chief Executive Dan
Fulton, and said its board had authorized the exploration of
strategic alternatives for its WRECO homebuilding and real
estate development business.
Weyerhaeuser also said it is considering a broad range of
options for WRECO, including whether to continue to hold it, or
a merger, sale or spin-off. It said the business is one of the
20 largest homebuilders in the United States, and that the
"improving fundamentals" of the housing market make it a prudent
time to explore strategic alternatives for the business.
Weyerhaeuser shares have risen 1.6 percent so far this year,
far short of double-digit gains for the broad stock market. But
the company's first-quarter net profit more than tripled, helped
by a strong recovery in demand from the U.S. housing market.
Company revenue rose 31 percent to $1.95 billion.
However, the company forecast slightly lower average selling
prices for lumber and oriented-strand board for the second
quarter. It also expects higher raw material costs.
Brookfield owns the Longview Timber parcel along with
Brookfield Infrastructure Partners, a limited
partnership that it partly owns, as well as with private
Brookfield said it expects to have cash proceeds of $600
million from the Longview Timber sale, after repayment of debt
and distributions to private investors, while Brookfield
Infrastructure would have net cash proceeds of about $470
Weyerhaeuser said Simons, 49, a former chief executive of
the Temple-Inland corrugated packaging business before its
acquisition by International Paper, would be active as CEO Elect
immediately. The company said Fulton will serve as executive
vice chairman of Weyerhaeuser's board until his retirement in