Wood, paper giant selling Minnesota operations

Timber and paper giant Weyerhaeuser Co. said Monday that it will sell its container-board packaging and recycling business to International Paper for $6 billion in a cash deal that includes five operations in Minnesota.

Weyerhaeuser has a recycling facility in New Brighton and packaging plants in Austin, Fridley, St. Paul and White Bear Lake, with a total of 429 employees.

It is not yet known if there will be layoffs or plant closings as a result of the deal, which is expected to close in the third quarter. International Paper spokeswoman Amy Sawyer said officials expect the acquisition to result in $400 million in "profit improvements" from consolidation of division headquarters and other integrated operations.

As for layoffs in Minnesota, she said, "We don't know right now. We just signed the purchase agreement and we now have several months ahead of us. The transaction will be [around] August. That will give us time to get to know their operations and to get to know their employees and management."

She emphasized that "we bought their business to run it."

Weyerhaeuser spokesman Bruce Amundson declined to speculate on possible layoffs but noted that the two corrugated box giants do share some geographic overlap in the Midwest.

In Minnesota, International Paper has 26 packaging workers in Minneapolis and 113 in Arden Hills.

International Paper, based in Memphis, has 50,000 employees in 20 countries and specializes in uncoated papers used for copying and envelopes as well as corrugated box board.

Weyerhaeuser, based in Federal Way, Wash., is selling the unit to focus on timber and real estate management. The company, which has its 108-year-old roots in Minnesota, grows timber used in structural lumber for homes and operates five residential real estate building firms.

Weyerhaeuser CEO Steven Rogel told investors Monday that "those areas present the greatest opportunities for the future."

While there has been a significant housing slump across the nation, Amundson said Weyerhaeuser believes the industry will turn around in two years and provide significant growth opportunities as baby boomers seek new homes.

Weyerhaeuser, with $16.3 billion in annual sales, has operations in 13 countries.