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UPDATE 1-International Paper gets OK to buy Weyerhaeuser unit

Mon May 5, 2008 12:27pm EDT

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WASHINGTON, May 5 (Reuters) - U.S. antitrust authorities have given International Paper (IP.N) approval to buy Weyerhaeuser Co's (WY.N) packaging business, the Federal Trade Commission said on Monday.

The value of the deal was $6 billion when it was first announced in March.

The antitrust clearance was included on a listing of approved deals the FTC issues periodically.

The paper and packaging industry in North America and Europe has been consolidating because of higher raw material costs and dwindling paper demand due to increasing Internet use.

International Paper is betting on paper and packaging and has sold its vast timberland holdings, while Weyerhaeuser has spun off its paper and packaging businesses to focus on its timberland holdings.

But the slump in the U.S. housing market has badly hurt Weyerhaeuser's wood products and real estate businesses in recent months. (Reporting by Diane Bartz; Editing by Andre Grenon)

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