The transaction includes nine containerboard mills, 72 packaging locations, 10 specialty-packaging plants, four Kraft bag and sack locations and 19 recycling facilities. The 14,000 employees who work at the properties are being transferred from Weyerhaeuser to International Paper.
Weyerhaeuser, which is in the process of refining its focus "as a timber-based company with businesses that enhance the value of our timberlands," said it expects to use a substantial portion of the after-tax proceeds from the sale to pay down debt.
The business has one or more properties in 31 US states and Mexico. The states in which it has operations are as follows: Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Iowa, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Tennessee, Texas, Utah, Virginia, Washington, and Wisconsin.
In June, Weyerhaeuser completed a review of a set of real estate projects and said that decisions to lower prices or abandon projects in response to continued deterioration in the housing market triggered the material impairments to the tune of $300 million in the second quarter, which it reports tomorrow. At that time it also revealed that its containerboard business was adversely affected by the extreme weather and flooding in the U.S. Midwest, which caused production shutdowns at company facilities and decreased the company's ability to operate its facilities or ship inventory for a period of time.
Weyerhaeuser in May said it planned to sell its Australian timber manufacturing and distribution business to Carter Holt Harvey, a New Zealand-based forest products company. Weyerhaeuser's maritime shipping and railway assets may also be for sale, according to published reports.
International Paper, as part of its strategy -- to "focus on global uncoated paper and packaging and its North American distribution business -- last week agreed to sell approximately 13,000 net acres of subsurface mineral rights located in the Haynesville Shale natural gas formation in northwest Louisiana to Chesapeake Energy Corporation for approximately $263 million. The transaction is expected to close in late August.
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