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 Americaís 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 continentís largest producer. South Carolina-based Bowater hasnít 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 companyís competitors supply about 70 percent of the continentís 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