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International Paper to buy Weyerhaeuser pulp mills

05 May '16

1 min read

US pulp and paper company, International Paper will acquire Weyerhaeuser pulp mills, producing pulp for diapers, hygiene products, tissue and textiles, for $2.2 billion. The transaction covers five pulp mills and two converting facilities to produce specialty pulp, softwood pulp and fluff pulp.

Both the companies have signed an agreement for the transaction, and the transaction is expected to close by the end of 2016.

Weyerhaeuser's pulp business involves approximately 1900 employees, and will give International Paper the flexibility to manage a wide range of products to fulfil customer demands.

Commenting on the acquisition, Mark Sutton, CEO and chairman of International Paper said, “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,” he added.

Because the transaction is a purchase of assets, International Paper expects to realise a tax benefit with an estimated net value of approximately $300 million. Including this benefit, the net price is approximately $1.9 billion. (MCJ)

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