SEPTEMBER 2008

International Paper finalizes purchase of Weyerhaeuser's packaging assets

International Paper has completed the purchase of the assets of Weyerhaeuser's Containerboard, Packaging and Recycling business for approximately $6 billion in cash, subject to post-closing adjustments.

Because the transaction is a purchase of assets rather than of stock, International Paper will realize a tax benefit that has an estimated net present value of approximately $1.4 billion.

Carol Roberts, senior vice president of International Paper’s packaging business, said she sees considerable upside potential in the acquisition.

“Weyerhaeuser has low-cost, well-run assets that complement our existing mill and converting system and offer significant synergies,” she said.

International Paper has identified profit improvement opportunities of about $400 million annually from the acquisition, as a result of reducing duplicate overhead costs, integrating manufacturing operations, optimizing product mix, and improving operational and supply chain efficiencies. The company expects to achieve at least 40 percent of the improvement within 12 months of completing the transaction. The remainder is expected to be fully realized by the end of the third year.