Canada OK's Weyerhaeuser-MacBlo Merger
10/29/99
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Title: CANADA OK's Weyerhaeuser-MacBlo Merger
Source: Environment News Service, http://www.ens.lycos.com/
Status: Copyright 1999, contact source for permission to reprint
Date: October 29, 1999
FEDERAL WAY, Washington, October 29, 1999 (ENS) - The Canadian
government has approved Weyerhaeuser's planned acquisition of
MacMillan Bloedel Ltd.
Already the world's largest producer of softwood lumber and market
pulp, and the second largest manufacturer of oriented strand board
(OSB), the acquisition will make Weyerhaeuser one of the top
three producers of packaging as well.
"The combined operations of Weyerhaeuser and MacMillan Bloedel will
create a North American powerhouse in our industry," said Steven
Rogel, Weyerhaeuser chairman, president, and chief executive officer.
"This approval moves us one step closer to allowing the two companies
to begin sharing technology, marketing knowledge, environmental
experience and management talent to meet the global needs of our
customers."
The boards of both companies unanimously approved an agreement last
June that provides MacMillan Bloedel shareholders with 0.28 shares of
common stock in Weyerhaeuser, or 0.28 equivalent exchangeable shares
in a new Weyerhaeuser Canadian subsidiary, for each MacMillan
Bloedel share owned.
Expected to close this fall, the transaction is subject to normal
regulatory approvals in the United States and Canada. The transaction
also requires a favorable vote by MacMillan Bloedel shareholders.
On Thursday, the Ontario Teachers' Pension Plan Board claimed that
the proposed takeover bid is inadequate. The group has filed a notice
of dissent and is demanding cash in lieu of stock should the deal go
through.
"We're doing this because we're not satisfied with the current deal,"
Roy Graydon, the fund's director of relationship investing told the
"Financial Post" Thursday. "We have done this to preserve the rights
available to us as shareholders in MacMillan Bloedel, including the
right to receive fair value for our shares and the right to receive
cash."
A two-thirds vote by MacMillan Bloedel shareholders is required for
approval of the merger. The fund holds about eight percent of
outstanding shares. If shareholders approve the takeover,
Weyerhaeuser and MacMillan Bloedel will form a lumber industry giant,
generating annual sales of $19.5 billion.
Weyerhaeuser has agreed to continue to actively support Canada's
three national forest technology organizations, to appoint a chief
science officer with broad responsibilities who would reside in the
company's Canadian head office, and to provide enhanced support to
university research initiatives in Canada. Weyerhaeuser also said its
Canadian head office would have significant management
responsibilities for the company's Canadian operations.
Weyerhaeuser has committed to maintain a Canadian presence on its
board of directors. Two Canadians currently serve on Weyerhaeuser's
board and the company said it plans to add a member from MacMillan
Bloedel's board after completion of the acquisition.
Overall employment levels at the Canadian production facilities of
the combined business will be maintained subject to market forces and
other conditions. In addition, Weyerhaeuser has agreed to implement
MacMillan Bloedel's commitments with respect to moving toward
variable retention harvesting in MacMillan Bloedel's coastal
operations, increasing old growth and habitat conservation, and
implementing MacMillan Bloedel's obligations under the Clayoquot
Memorandum of Understanding.
Weyerhaeuser Company, one of the world's largest integrated forest
products companies, was incorporated in 1900. In 1998, sales were
$10.8 billion. It has offices or operations in 12 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.
MacMillan Bloedel is one of Canada's largest forest products
companies with integrated operations in Canada, the United States,
and Mexico. The products of MacMillan Bloedel and its affiliate
companies are marketed throughout the world and include lumber,
panelboard, engineered lumber, containerboard, and corrugated
containers.