UPDATE, 10/30/13, 5:45 p.m. EDT: Additional information on Plum Creek’s outside counsel has been added to the article’s sixth and seventh paragraphs.
Seattle-based Plum Creek Timber Company has agreed to acquire all of packaging company MeadWestvaco’s U.S. timberlands, and will also invest in the latter’s South Carolina rural development properties, in a deal worth roughly $1.1 billion.
Announced late Monday, the deal calls for Plum Creek—whose roughly 6.3 million acres make it one of the nation’s largest private landowners—to pay $74 million in cash, along with $860 million in the form of a 10-year installment note, in exchange for more than 500,000 acres of forestland spread across Alabama, Georgia, South Carolina, Virginia and West Virginia. Plum Creek will also acquire the rights to coal and wind power assets on those lands, though MeadWestvaco will retain oil and natural gas rights on more than 190,000 acres of Marcellus Shale assets in West Virginia.
The two companies have also agreed to form a joint venture tied to MeadWestvaco’s 109,000 acres of rural development land in the Charleston, S.C., area. Plum Creek will pay roughly $152 million in cash for its stake in the arrangement. The deal is expected to close before the end of the year.
Plum Creek—which harvests timber to produce lumber, plywood and fiberboard—said it expects the acquired land will average nearly 3 million tons of harvested timber over the next decade. The company also develops land through a real estate investment trust subsidiary. MeadWestvaco—a packaging company based in Richmond—said it plans to use some of the proceeds from the sale to repay an outstanding loan and to fund development.
