Weyerhaeuser Co. (WY), a U.S. real-estate investment trust that owns timberland, agreed to buy Longview Timber LLC for $2.65 billion including debt from affiliates of Brookfield Asset Management Inc. (BAM/A) in the third-largest forestry acquisition in North America.
The deal is expected to close in July and immediately add to Weyerhaeuser’s funds for distribution, the Federal Way, Washington-based company said yesterday in a statement. Weyerhaeuser plans to boost its quarterly cash dividend to 22 cents a share in September from 20 cents.
Weyerhaeuser, which also said that former Temple-Inland Inc. Chief Executive Officer Doyle Simons will take over as its CEO in August, will get about 645,000 acres (261,000 hectares) of timberlands in Washington and Oregon from buying Longview. The deal will boost the U.S. acreage that it owns or controls to about 6.6 million.
Weyerhaeuser is paying $4,109 per acre for the timberland, more than the estimated $3,200 per-acre value of the company’s existing lands in the Pacific Northwest, Paul Quinn, a Vancouver-based analyst at RBC Capital Markets who has a buy rating on Weyerhaeuser, said today in a note to clients.