Plum Creek Timber Co., a real estate investment trust with investments in forest products, agreed to acquire MeadWestvaco Corp.’s U.S. timberlands for $1.09 billion.
Plum Creek will pay $869 million for 501,000 acres of woodlands in Alabama, Georgia, South Carolina, Virginia and West Virginia and $152 million for “high-value” rural lands and development-quality lands near Charleston, South Carolina, the Seattle-based company said today in a statement.
“These assets should integrate seamlessly into our existing timberland ownership in the Southeast and add to our presence in key markets,” Rick Holley, Plum Creek’s chief executive officer, said in the statement.
The deal with Richmond, Virginia-based MeadWestvaco, a maker of consumer packaging with operations in North America, Asia, Europe and South America, also includes $65 million for subsurface rights, mineral rights and wind-power assets associated with the timberlands, Plum Creek said.
At closing, Plum Creek will pay MeadWestvaco $226 million in cash and issue an $860 million 10-year installment note for the assets, Plum Creek said in the statement.
Both companies also agreed to form joint ventures to develop lands in South Carolina, MeadWestvaco said in a separate statement. Most of the proceeds from the transaction will be distributed to MeadWestvaco shareholders, the packaging maker said.
Plum Creek fell 1.8 percent to $49 a share after the close of trading in New York. MeadWestvaco dropped 0.54 percent as of 4:15 p.m. in regular trading. The announcement came after the market’s close.