Weyerhaeuser Company (NYSE: WY) today announced the signing of a letter of intent with Global Forest Partners LP (GFP) in a strategic move to focus Weyerhaeuser's international timberland investment on South America.
Under the letter of intent, Weyerhaeuser will acquire complete ownership of the Los Piques plywood mill and half of the 81,000 hectares of planted forests that Weyerhaeuser and two GFP investment funds own through separate joint ventures in Uruguay. The GFP investment funds will assume ownership of the remaining hectares from the joint ventures.
The letter of intent also affects the companies' Nelson Joint Venture in New Zealand. Under the agreement, GFP investment funds will acquire Weyerhaeuser New Zealand, Inc., and Weyerhaeuser's interest in the Nelson JV assets. These assets include approximately 67,000 productive hectares of plantation forests in the Nelson/Marlborough region and the Kaituna sawmill at Renwick, which has a log input capacity on a single shift of 80,000 cubic meters annually.
``This agreement significantly restructures our international holdings in alignment with our long-term strategic direction, simplifies our investment and management structure in Uruguay and maximizes our flexibility,Ã¢â‚¬â„¢Ã¢â‚¬â„¢ said Craig D. Neeser, Weyerhaeuser senior vice president, Industrial Wood Products and International. ``The New Zealand team has made outstanding contributions to our operations there and will continue to position these assets for success with GFP.Ã¢â‚¬â„¢Ã¢â‚¬â„¢
``New Zealand already plays an important role in our firm's diversified international timberland investment portfolios and this agreement enhances that position,Ã¢â‚¬â„¢Ã¢â‚¬â„¢ said Michael Edgar, director of Asia Pacific Investments, Global Forest Partners LP. ``This agreement also underscores the view GFP that New Zealand is an attractive forestry investment location.Ã¢â‚¬â„¢Ã¢â‚¬â„¢
``The Uruguayan joint ventures are among the first and finest green field projects of scale in this geography," said Peter C. Mertz, GFP chief executive officer. "The acquisition of these assets from the joint ventures will enable us to build upon our early experiences and will complement our other investments in Uruguay.Ã¢â‚¬â„¢Ã¢â‚¬â„¢
Terms of the agreement were not disclosed. The transaction is subject to the negotiation of definitive agreements and regulatory approvals.
The Nelson Forests Joint Venture had announced in February 2006 that it would explore the sale of its New Zealand assets. When that process did not result in a sale, subsequent discussions between the partners regarding their overall relationship resulted in the letter of intent announced today.
Weyerhaeuser Company, one of the world's largest forest products companies, was incorporated in 1900. In 2006, sales were $21.9 billion. It has offices or operations in 18 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities. Additional information about Weyerhaeuser's businesses, products and practices is available at http://www.weyerhaeuser.com.
About Global Forest Partners
Global Forest Partners LP is an SEC-registered investment adviser, specializing in the structuring and management of sustainable forestry investments. Founded in 1982, the firm is recognized as a leader in forestry investing and for its unique global perspective and experience. GFP, which is headquartered in West Lebanon, New Hampshire, currently manages a USD 1.5 billion portfolio of closed-end commingled timberfunds and separate accounts on behalf of institutional clients and other qualified investors. Additional information about GFP can be found at http://www.gfplp.com.