Weyerhaeuser Bid for Willamette Rejected

-- graphic arts online, 12/1/2000

In early November, Weyerhaeuser made a bid for Willamette Industries. The initial offer, valuing the company at $5.3 billion, was rejected by the Willamette board, stating the bid "did not reflect the company's value and growth prospects." Weyerhaeuser responded with firm commitment to complete the transaction, but no further bid was made.

Several options were available, including surrender, "white knight" rescues, and a proxy war. In any case, consolidation in the uncoated freesheet is likely to continue worldwide.

Weyerhaeuser has a share in the uncoated freesheet business, primarily in the retail merchant and office supply segment. Unlike Willamette, Weyerhaeuser lets its distributors drive the market demands, including price and quality.

The two companies also have formidable packaging and forest products operations. There is wide overlap in packaging, primarily corrugating, though Willamette is much stronger and more independent because of the value-added concentration of its product mix.

The forest products operations are very different from each other, with Weyerhaeuser dominating land, export, and commodity markets worldwide.