International Paper Completes Sale
of Weldwood of Canada Limited
Stamford, CT, USA 03 January 2005/PRNewswire-FirstCall/ -- International Paper (NYSE:IP)
announced it has completed the sale of its Weldwood of Canada Limited subsidiary
to West Fraser Timber Co., Ltd. of Vancouver, Canada, for C. $1.23 billion
(approximately U.S. $1 billion). International Paper's net cash proceeds
received from the sale, including closing adjustments, were approximately U.S.
$1.1 billion. The transaction was completed Friday, Dec. 31, 2004.
While the loss on the sale, previously recorded in discontinued operations
during the 2004 third quarter, is subject to post-closing adjustments, it is
currently anticipated that the loss will be approximately 10% lower than the
$795 million loss previously estimated at Sept. 30, 2004.
The sale includes eight wholly owned and four joint venture mills in British
Columbia and Alberta, Canada, manufacturing lumber, plywood, laminated veneer
lumber, treated wood products and northern bleached softwood kraft pulp.
Weldwood also manages 8 million acres of Crown land under a variety of long-term
provincial government agreements and employs more than 3,000 people.
MeadWestvaco Agrees to Sell
Papers Assets for $2.3 Billion
Stamford, Conn.,
January 18, 2005 – MeadWestvaco
Corporation (NYSE: MWV) today announced
that it has reached a definitive
agreement to sell its Papers business
and associated assets for $2.3 billion
to a new company controlled by Cerberus
Capital Management L.P., a private, New
York-based investment firm.
“This transaction
marks an important strategic step for
MeadWestvaco,” said John A. Luke, Jr.,
chairman and chief executive officer.
“It makes us a more focused company,
able to deliver stronger, more
consistent financial returns.
Immediately, the sale allows us to
reduce the company’s debt, return value
to shareholders and position the company
for profitable growth. It also enables
us to concentrate more of our resources
on capturing growth opportunities in the
global packaging markets.
“This sale
monetizes the value of our efforts to
create the leading Coated Papers
franchise in North America,” Mr. Luke
continued. “Over the last several years,
we have reduced costs and gained market
share in a challenging economic
environment, and this sale creates a new
Papers business that is well positioned
to compete as a stand-alone company.”
After the closing,
MeadWestvaco will have more than $6.0
billion in annual revenues, with about
three-quarters coming from the packaging
business and about one-third coming from
international sources, and approximately
24,000 employees. The company will focus
on expanding its higher margin packaging
business geographically by leveraging
its strong positions in North America
and Europe to penetrate growth markets
in Asia, Eastern Europe and Latin
America. Additionally, the company will
continue to benefit from strong market
positions in Consumer and Office
Products, Specialty Chemicals and
Specialty Papers.
The sale is subject
to customary closing conditions,
including regulatory approvals and
purchaser’s financing, and is expected
to be completed in the second quarter of
2005.
MeadWestvaco
expects the transaction to result in
after-tax net proceeds of approximately
$2.1 billion at closing, which it will
use to improve its overall capital
structure. The company expects to use
approximately $900 million to $1.1
billion of the proceeds to pay down debt
and between $500 million and $700
million to return value to shareholders
through stock repurchases. At the
completion of the capital restructuring,
the company expects its debt to capital
ratio to be 40 percent or better. The
remaining cash will be available either
for strategic growth opportunities or to
further pay down debt and return value
to shareholders.
MeadWestvaco
estimates that the transaction will
result in a one-time after-tax
accounting loss of between $650 and $675
million, the majority of which will be
recorded in the fourth quarter of 2004.
In addition, the Papers business
operating results will be reported as
discontinued operations in
MeadWestvaco’s consolidated financial
statements beginning in the first
quarter of 2005. The Papers business has
approximately $2.3 billion in annual
sales.
Under the terms of
the agreement, the new company will
acquire MeadWestvaco’s Papers business,
which consists primarily of mills
located in Chillicothe, Ohio; Escanaba,
Michigan; Luke, Maryland; Rumford,
Maine; and Wickliffe, Kentucky. These
mills have a combined annual capacity of
approximately 2.05 million tons of
coated paper, 290,000 tons of carbonless
paper and 110,000 tons of uncoated
paper.
The sale also
includes approximately 900,000 acres of
forestlands in Illinois, Kentucky,
Michigan, Missouri, Ohio and Tennessee,
which provide wood to these mills. After
the sale of the Papers business,
MeadWestvaco will own approximately 1.2
million acres of forestland.
The acquiring
company will be privately held and
headquartered in Dayton, Ohio, with the
current Papers management team
continuing to lead the business. Peter
H. Vogel, Jr., current president of
MeadWestvaco’s Papers Group, will become
chief executive officer of the new
company. Approximately 6,300 employees
of the Papers business are expected to
join the new company, including
corporate staff who have been
exclusively dedicated to supporting that
business.
“Separation from
MeadWestvaco gives the Papers business a
tremendous opportunity to build on our
leading position with customers in the
marketplace,” said Mr. Vogel. “In
Cerberus, we have a strong financial
partner committed to the business. We
have an outstanding group of employees,
who together have a great opportunity to
make us successful.”
Goldman, Sachs &
Co. and UBS Investment Bank are acting
as financial advisors to MeadWestvaco.
Greenhill & Co. LLC provided the board
of directors of MeadWestvaco with a
fairness opinion. MeadWestvaco was
represented by the law firm of Wachtell,
Lipton, Rosen & Katz.
About Cerberus
Capital Management, L. P.
Headquartered in
New York, Cerberus Capital Management,
L.P. and its affiliated entities manage
funds and accounts with capital in
excess of $14 billion.
Stora Enso Plans to Acquire French
Merchanting Business From IP
Helsinki, Finland 18 January 2005/PRNewswire-FirstCall/ -- Stora Enso (NYSE:SEO)
today announced that Stora Enso is in negotiations to acquire a leading French
paper merchant, Papeteries de France (PdF), from International Paper. PdF, which
has net sales of about EUR 160 million from a sales volume of some 160 000
tonnes of paper, would become part of the Stora Enso Merchants division,
Papyrus. PdF has about 220 employees, all of whom are located in France.
The acquisition is expected to be closed at the end of March 2005, subject to
formal processes and approval by regulatory authorities. The financial terms of
the proposed transaction will be disclosed following signing of a definitive
agreement, which is expected to take place in February.
The planned acquisition of PdF is a further step in strengthening the Papyrus
presence in France and Western Europe.
Papyrus is a wholly owned paper merchanting subsidiary of Stora Enso with annual
sales of about EUR 740 million. Papyrus holds a leading position in the Nordic
countries and a strong market position in Western Europe. Papyrus currently has
a presence in thirteen European markets, including operations in France with net
sales of some EUR 100 million and about 135 employees.
Stora Enso is an integrated paper, packaging and forest products company
producing publication and fine papers, packaging boards and wood products, areas
in which the Group is a global market leader. Stora Enso sales totalled EUR
12.2 billion in 2003. The Group has some 44 000 employees in more than 40
countries in five continents and about 15.7 million tonnes of paper and board
annual production capacity and 7.4 million m3 of sawn wood products, including
2.8 million m3 of value-added products. Stora Enso's shares are listed in
Helsinki, Stockholm and New York.