Moscow. November 9. The owner of American forest land Co buys Weyerhaeuser rival Plum Creek Timber Co, the deal will create a company with a market capitalization of about $23 billion, which will be the largest in the U.S. private owner of forest land, the report said Weyerhaeuser.
Plum Creek shareholders will receive for each paper of 1.6 shares of Weyerhaeuser.
Based on the value of the shares of both companies on 6 November, the deal includes a 21% premium to the market price of the securities of Plum Creek.
According to estimates by Bloomberg, Plum Creek is estimated at $8.4 billion
As a result of the transaction approved by the boards of Directors of both companies, the Weyerhaeuser shareholders will own about 65% of the combined company.
President and chief Executive officer of Weyerhaeuser, will head the new company. Plum Creek CEO Rick Holly will become non-Executive Chairman of the Board of Directors of the combined company.
Weyerhaeuser intends to buy back shares worth $2.5 billion shortly after the closing of the transaction. The company plans to pay a dividend in the amount of us $1.24 per share per year, equivalent to the current level of payments to Weyerhaeuser and 13% of the dividends Plum Creek.
The combined company will own forest areas with an area of more than 5.3 million hectares in the United States.
The merger of Weyerhaeuser and Plum Creek will allow the two companies to save on costs of about $100 million a year.