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Weyerhaeuser buys MacBlo
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June 21, 1999: 3:52 p.m. ET
MacMillan Bloedel holders to get 38% premium in $2.45B stock swap
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NEW YORK (CNNfn) - Weyerhaeuser Co., the third-biggest U.S. forestry company, will acquire Canada's largest forest products company, MacMillan Bloedel Inc., in a stock swap valued at $2.45 billion, the companies said Monday.
The arrangement comes as forestry companies on both sides of the border regroup after one of their worst decades on record, resulting from slumping sales to Asia and Eastern Europe and sagging prices for paper, lumber and wood byproducts. The agreement is subject to regulatory approval in both countries, as well as Canadian court approval.
"While we were not seeking a merger of this nature, the terms of this agreement provide an attractive premium to our shareholders, plus the opportunity to maintain an interest in the clear leader in the business," MacMillan Bloedel President Tom Stephens said.
Under terms of the agreement, MacMillan Bloedel (MMBL) shareholders will receive 0.28 common share of Weyerhaeuser (WY) stock for each of their shares. At Weyerhaeuser's closing price Friday of 69-3/4, MacMillan Bloedel U.S. shareholders will receive $19.53 for each of their shares, a 38 percent premium over MacMillan Bloedel's closing Nasdaq stock price Friday of 14-2/16.
MacMillan Bloedel's Canadian investors, meantime, also will receive 0.28 of a Weyerhaeuser share, but of a yet-to-be-established Canadian subsidiary, said Bruce Amundson, a Weyerhaeuser spokesman.
About 65 percent of MacMillan Bloedel's stock is held in Canada and is listed on the Toronto Stock Exchange. The remaining 35 percent is held in the U.S. and elsewhere.
Vancouver, British Columbia-based MacMillan Bloedel, Canada's largest forest products company, manages 4.94 million acres of productive timberlands, of which more than half are located in British Columbia, Canada's westernmost province. It produces lumber, panel boards, containerboard and corrugated containers.
Federal Way, Wash.-based Weyerhaeuser is one of the world's biggest forest products producers, with operations in 12 countries around the world. Weyerhaeuser Canada Ltd., which began operations in 1965, is now one of the largest forest products companies in Western Canada, based on sales and assets.
Weyerhaeuser will have annual sales of around $13.3 billion once the acquisition is completed, which will add to earnings immediately, Weyerhaeuser President Steven Rogel said.
Weyerhaeuser shares fell 2-15/16 to 66 3/16 in late afternoon trading Monday. MacMillan's U.S. shares surged 3-1/4, or 23 percent, to 17 11/16, while its Canadian shares rose C$5.05 to C$26.10 in Toronto. 
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