Mergers & Acquisitions in the Wood & Paper Industries

Mergers & Acquisitions in Wood & Paper Industries

compiled by George Draffan, Endgame.org

for mergers and acquisitions in other industries, click here

for a ranking of U.S. and global wood and paper corporations, click here

Mergers and acquisitions are often complex in the wood and paper industries. Joint ventures are common, as are partial acquisitions in which one corporation will buy a portion of the timberland, or a particular mill, owned by another corporation. Some companies are broken up over time and distributed among several other corporations. Timberland institutional management organizations (TIMOs) and real estate investment trusts (REITs) are acquiring and managing timberland traditionally held by wood and paper manufacturing companies (click here for more on institutional ownership).

This simplified list only includes mergers between larger corporations and acquisitions of substantial operations.

Year

Buyer

Seller

Acres

$
M million B billion

2007	Abitibi-Consolidated	Bowater		1.4B	"Abitibi-Consolidated Inc. and Bowater Inc., North America’s two largest makers of newsprint, agreed to a merger valued at $ 1. 4 billion to reduce costs as U. S. demand for newsprint sags. Shares of both companies surged more than 20 percent on the transaction, which will generate about $ 250 million in savings for the new Abitibi-Bowater Inc. U. S. newsprint consumption has dropped 26 percent since 1999. Slumping newsprint sales led to two straight years of losses for Montreal-based Abitibi, the continent’s largest producer. South Carolina-based Bowater hasn’t made a profit since 2001. Bowater shareholders will own 52 percent of the new company and the rest will be held by Abitibi investors.... Across North America, 15 of the new company’s competitors supply about 70 percent of the continent’s demand for newsprint..." (Arkansas Democrat Gazette, Jan 30, 2007).
2006	CMP Investments LP and CMP Holdings LLC, affiliate of Apollo Management LP	International Paper		1.4B	International Paper Company agreement to sell its coated and supercalendered papers business to an affiliate of Apollo Management L.P. The Business includes four paper mills located in Jay, Maine; Bucksport, Maine; Quinnesec, Michigan; and Sartell, Minnesota. The purchase price consists of approximately $1.37 billion in cash plus a $29 million, ten percent limited partnership interest in Parent.
2006	Lyme Timber	International Paper	275,000	137M	April 2006: International Paper Agrees to Sell 275,000 Acres of Adirondack Forestland to Lyme Timber Company for $137 Million
2006	Resource Management Service LLC	International Paper	3,800,000	5B	April 2006: Resource Management Service bought 3.8 million acres in southern states and 440,000 acres in Michigan from International Paper for $5 billion.
2006	TimberSTAR.	International Paper	900,000	1.1B	TimberSTAR bought 900,000 acres in Louisiana, Texas and Arkansas from International Paper for $1.1 billion.
2005	GMO Renewable Resources LLC	International Paper	1,100,000	250M	IP sold 1,100,000 acres in central Maine and 24,000 acres in northern New Hampshire. GMO agreed to a long-term wood fiber supply agreement for the IP paper mills in Jay and Bucksport Maine and IP will provide forest management services, including SFIcertification.
2005	Cerebus Capital Management	MeadWestvaco	900,000	2.3B	The papers business and related assets will be a private business named NewPage Corporation. NewPage will includes mill in Ohio, Micgigan, Maryland, Maine, and Kentucky as well as 900,000 acres of timberland in Ohio, Illinois, Kentucky, Michigan, Missouri and Tennesee. MeadWestvaco will focus on its packaging, consumer and office products, specialty chemicals and specialty papers. (MeadWestvaco news release, Jan 18, 2005).
2005	Koch Industries	Georgia-Pacific		13.2B
2004	Madison Dearborn Partners	Boise Cascade	2,300,000	3.7B	"The wood and paper assets (including 2.3 million acres of timberland, 5 pulp and paper rmills, and 22 wood products mills in the USA, Canada, and Brazil) will be acquired by Boise Cascade, L.L.C. which is controlled by Madison Dearborn Partners, a private equity firm with investments in communications, consumer, financial services, and healthcare, and involved in the buyout of other paper, packaging, and forest products comanies including Buckeye Technologies, Graphic Packaging International (formerly Riverwood International), Packaging Corporation of America, and Jefferson Smurfit Group." (news release, July 26, 2004)
2003	Nippon	Daishowa			Nippon Unipac Holding acquired Daishowa Paper Manufacturing.
2003	Domtar	Tembec			Agreement-in-principle to create a joint venture equally owned by both companies; bring together timber and softwood (spruce, pine and fir, (SPF)) lumber operations in the provinces of Québec and Ontario; and market softwood lumber manufactured by Tembec at its SPF sawmills operations in British Columbia and by Domtar at its Lebel-sur-Quévillon sawmill; will have assets valued at approximately $850 million and its pro forma net sales for 2002 total $900 million. It will have a manufacturing capacity of 2.1 billion board feet and a sales capacity of 2.6 billion board feet. Based on its sales capacity, the joint venture will be the second largest solid wood products company in Canada and the fourth largest in North America.
2002	Weyerhaeuser	Willamette Industries		6.1B	Announced January 21, 2002.
2001	Temple Inland	Gaylord Container		786M	Announced Sept 2001.
2001	Mead	Westvaco		3B
2001	Bowater	Alliance Forest Products		770M	After acquisition of Alliance, Bowater will own or lease 1.8 million acres of timberlands in the U.S. and Canada and will have cutting rights to 32 million acres of timber in Canada. Bowater is one of the world's largest consumers of recycled newspapers and magazines, with a 20% share of the newsprint market in North America.
2001	Plum Creek Timber	The Timber Company (Georgia-Pacific land subsidiary)	4,000,000	4B	More than doubles Plum Creek's timberland holdings to 7.8 million acres in 19 states, making it #2 timberland owner in U.S. (after International Paper). G-P spun off its timberlands to The Timber Company in 1997. Plum Creek assumed the 10-year timber supply agreement between G-P and TTC.
2000	Smurfit-Stone	St Laurent
2000	Georgia-Pacific	Fort James		11B
2000	International Paper	Champion		9.6B
2000	International Paper	Shorewood Packaging
2000	Stora Enso	Consolidated Papers		5.9B
1999	Weyerhaeuser	MacMillan Bloedel		2.5B
1998	Plum Creek Timber	Sappi land in Maine	905,000	180M	S.D. Warren Company and subsidiaries doing business as Sappi Fine Paper North America (South African Pulp & Paper). Click here for more on Plum Creek's real estate
1998	International Paper	Union Camp		7.1B
1998	Jefferson Smurfit	Stone Container		6.7B
1997	James River	Fort Howard		5.7B
1995	International Paper	Federal Paper Board		3.8B
1995	Kimberly-Clark	Scott Paper		7.9B
1991	Bowater	Great Northern Nekoosa
1990	Hanson Industries	Cavenham
1989	Georgia-Pacific	Great Northern Nekoosa		5B
1988	Sierra Pacific Industries	Santa Fe Pacific Timber
1985	Cavenham	Crown Zellerbach

Primer on Corporate Power

Endgame

Public Information Network