According to Brookfield Asset Management, it will sell its Longview Timber Holdings for US$2.65 billion to Weyerhaeuser Co. This will include assumption of debt. The firm's nearby paper and packaging business will also be sold US$1.025 billion to KapStone Paper and Packaging Corp.
Longview Fibre Paper and Packaging operations include a big paper mill and seven container plants that produce Kraft paper, corrugated boxes and container board. The net proceeds from the transaction are expected to be at US$250 million after debt and distributions to its investors.
According to Senior Managing Partner in Brookfield's Private Equity Group on Sunday, timing of the separate sale transactions is coincidental. It was also stated that the timber acquisition will boost the company's earnings and an intended increase with Weyerhaeuser's dividends will go up 22 cents per share from the previous 20 cents per share.
The Longview Timber parcel includes 645,000 acres in Washington and California. These are contiguous with Weyerhaeuser's existing timberlands that are based in Federal Way, Washington.
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