MeadWestvaco confirms completion of sale of its entire US forestlands of 501,000 acres to Plum Creek for US$1.1B; Richmond, Virginia-based company expects to return US$665M of US$950M net proceeds to shareholders, use US$210M to repay outstanding loans
December 6, 2013
– MeadWestvaco Corporation (NYSE: MWV) today announced completion of the previously announced agreement with Plum Creek Timber Company Inc. (PCL) whereby Plum Creek has acquired all of MWV’s U.S. forestlands (501,000 acres) and has invested in a newly formed partnership comprised of MWV’s development properties in the Charleston, South Carolina, region (109,000 acres). The total consideration of the transaction was approximately $1.1 billion, and consists of $220 million in cash and $860 million in the form of a ten-year installment note that MWV expects to monetize within the next few weeks. The aggregate value of the transaction, including both parties’ investments in the partnership, was approximately $1.5 billion.
MWV expects to receive net proceeds of approximately $950 million in cash following the monetization of the installment note, of which the company expects to return $665 million to shareholders. The company will determine the optimal form of shareholder returns in January 2014, following the monetization of the note. In addition, $210 million will be used to repay an outstanding term loan in order to maintain MWV’s investment grade rating and $75 million will be retained by the new partnership to fund development activities.
MWV has retained full ownership of its oil and natural gas rights on approximately 191,000 acres of land in West Virginia that are located over the Marcellus Shale fairway. MWV no longer owns forestland assets in the United States and continues to own and manage approximately 135,000 acres of forestland in the state of Santa Catarina, Brazil.
MeadWestvaco Corporation (MWV) is a global packaging company providing innovative solutions to the world’s most admired brands in the healthcare, beauty and personal care, food, beverage, home and garden, tobacco, and agricultural industries. The company also produces specialty chemicals for the automotive, energy, and infrastructure industries and maximizes the value of its development land holdings. MWV’s network of 125 facilities and 16,000 employees spans North America, South America, Europe and Asia. The company has been recognized for financial performance and environmental stewardship with a place on the Dow Jones Sustainability World Index every year since 2004. Learn more at www.mwv.com.