International Paper To Buy Weyerhaeuser Containerboard Unit For $6B In Cash

Mar 18, 2008 (financialwire.net via COMTEX) -- WY | news | PowerRating | PR Charts -- March 17, 2008 (FinancialWire) International Paper Co. (NYSE: IP | news | PowerRating | PR Charts ) has agreed to acquire the containerboard unit of Weyerhaeuser Co. (NYSE: WY | news | PowerRating | PR Charts ) for $6 billion in cash.

International Paper said it will pay for the purchase through increased debt. The company has greatly cut its debt and improved cash flow since launching a major reorganization in 2005 to move away from forest products and focus on producing uncoated paper and containerboard.

International Paper said the purchase will increase its market presence in the United States and Mexico for the company's core products and boost profits over the long haul.

The sale includes nine container board mills, 72 packaging locations, 10 specialty-packaging plants, four kraft bag and sack locations, and 19 recycling plants. About 14,300 employees work at the containerboard packaging and recycling business.

International Paper said that the sale is expected to close in the third quarter of 2008, subject to regulatory reviews and completion of financing. Weyerhaeuser shares rose $1.09 to close at $63.06, while shares of International Paper fell $2.79 to close at $29.47.

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