New York, New York, USA 05 July 2013 -- Brookfield Asset Management recently announced that it has agreed to sell both Longview Timber and Longview Fibre Paper and Packaging in two separate transactions for aggregate proceeds of $3.675 billion.
Brookfield has agreed to sell 100% of Longview Timber to Weyerhaeuser Co. for $2.65 billion including the assumption of debt. Longview Timber consists of approximately 645,000 acres of high quality timberlands in the U.S. Pacific Northwest and is held through a Brookfield managed global timber fund in which Brookfield is an investor alongside Brookfield Infrastructure Partners and private institutional investors. After repayment of debt and distribution of proceeds to private fund investors, net cash proceeds to Brookfield will be approximately $600 million, on account of its investment. In addition, Brookfield Infrastructure will receive net proceeds of approximately $470 million.
“Although we are selling our Longview timber assets, we believe that timberland investments provide significant benefits to institutional investment portfolios and have a strong long-term potential for growth. Going forward, we will continue to pursue new timberland investment opportunities through our private fund initiatives with institutional investment partners,” said Reid Carter, Managing Partner of Brookfield Timberlands.
Brookfield also agreed this week to sell Longview Fibre Paper and Packaging to KapStone Paper and Packaging for $1.025 billion. Longview Fibre Paper and Packaging operates a large integrated paper mill at Longview Washington and seven container plants in the U.S. Pacific Northwest, producing Kraft paper, container board and corrugated boxes, and is held through a Brookfield managed private equity fund. After repayment of debt and distribution of proceeds to the other investors in the fund, net cash proceeds to Brookfield will be approximately $250 million.
“We acquired these timberlands and manufacturing assets as one business in 2007 and restructured the business, separating the manufacturing business from the timberlands and engaging in an operational turnaround of the manufacturing business by our private equity fund. While the timing of the sale transactions is coincidental, for investors in our funds these transactions represent monetization at excellent returns and puts each of these assets into the hands of strategic buyers who will be able to take them to the next level,” said Cyrus Madon, Senior Managing Partner in Brookfield’s Private Equity Group.