Weyerhaeuser Co. said Wednesday it reached a definitive agreement to combine its Fine Paper business and related assets with Domtar Inc. in a cash and stock deal worth more than $3 billion.
Under the terms of the agreement, Weyerhaeuser will distribute ownership of the Fine Paper business and related assets to Weyerhaeuser shareholders in either a spin-off or split-off transaction. Weyerhaeuser will receive a $1.35 billion cash payment from Domtar, and Weyerhaeuser shareholders will receive 55 percent of the new company's stock. Domtar stockholders will own a 45 percent stake in the new company.
Weyerhaeuser manufacturing assets included in the combination include: -- Eight paper mills and associated pulp mills (Dryden, Ontario;
Hawesville, Ky.; Johnsonburg, Pa.; Kingsport, Tenn.; Bennettsville,
S.C.; Plymouth, N.C.; Prince Albert, Saskatchewan; Rothschild, Wis.).
-- 14 converting centers (Brownsville, Tenn.; Cerritos, Calif,; Dallas,
Texas; DuBois, Pa.; Indianapolis, Ind.; Langhorne, Pa.; Mira Loma,
Calif.; Owensboro, Ky.; Plymouth, N.C.; Prince Albert, Saskatchewan;
Ridgefields, Tenn.; Rock Hill, S.C; Tatum, S.C., Washington Court,
Ohio).
-- The market pulp mill at Kamloops, British Columbia.
-- The coated groundwood mill in Columbus, Miss.
-- Two softwood lumber mills (Big River, Saskatchewan; Ear Falls,
Ontario).
Raymond Royer, Domtar president and chief executive officer, will lead the new organization, with a management team composed of executives from Weyerhaeuser paper operations and Domtar. This team includes Marvin Cooper, Weyerhaeuser senior vice president, Cellulose Fiber & White Paper, Containerboard Manufacturing and Engineering, who will become chief operating officer of the new company.
The "new Domtar" will have its head office in Montreal, Quebec, while the headquarters of operations will be in Fort Mill, S.C.
Weyerhaeuser and Domtar will continue to operate separately until the transaction closes, expected in the first quarter of 2007.