Weyerhaeuser Says They Are Still Interested in Willamette
Tuesday, October 16, 2001
FEDERAL WAY, Wash.--Oct. 12, 2001--Weyerhaeuser Company today announced that it sent a letter to William Swindells, chairman, and Duane McDougall, president and chief executive officer, of Willamette Industries, Inc., regarding potential synergies achievable in a combination of Willamette and Weyerhaeuser. Commenting on the letter, Steven R. Rogel, chairman, president and chief executive officer of Weyerhaeuser, stated: "Weyerhaeuser remains committed to a business combination with Willamette and is ready to begin meaningful negotiations immediately. We believe Willamette shareholders support negotiations regarding the proposed business combination. We strongly discourage Willamette from taking any actions that may impede or delay such negotiations or otherwise impair Willamette shareholder value.'' The text of Mr. Rogel's letter is set forth below: October 12, 2001 Willamette Industries, Inc. 1300 Southwest Fifth Avenue Portland, Oregon 97201 Attention: William Swindells, Chairman Duane C. McDougall, President and Chief Executive Officer Dear Messrs. Swindells and McDougall: I am writing to make sure that you, your Board of Directors and your shareholders understand Weyerhaeuser's views as to the synergies that could be attained through the combination of Willamette Industries and Weyerhaeuser. In your letter of October 11, 2001, you refer to synergy and value enhancement estimates prepared in September 1998. As set forth below, these rough estimates for discussion purposes at that time are simply not relevant to a combination of our companies today. - The synergy figures to which you refer were derived from an internal working draft prepared over three years ago. This draft was meant to serve as the starting point for discussions in 1998 between our two companies about the synergies that we might attain following a combination. Let me remind you that you refused to engage in any meaningful discussions with us in 1998, just as you have refused to do so since then. - A significant portion of the potential benefits was based on process improvements and capital-deployment efficiencies that Weyerhaeuser has since implemented. - Furthermore, since 1998, Weyerhaeuser has completed three significant acquisitions: the Dryden mills, MacMillan Bloedel and Trus Joist International. These acquisitions have allowed us to further focus and streamline our business, resulting in significant cost savings. In short, Weyerhaeuser has not stood still since 1998. Through the efforts of our dedicated employees, we have made significant progress in capturing many of the opportunities to improve our business we saw three years ago. Accordingly, many of the potential benefits outlined in the 1998 estimates have either been achieved or are no longer relevant to our business. Many things have changed since 1998, and I would not want reliance on old estimates to prevent our companies from completing a mutually beneficial transaction. As we have previously stated, Weyerhaeuser's best estimate, based on publicly available information, of the synergies that could be realistically achieved is $300 million, and our $50 per share cash offer incorporates that estimate. You have never disclosed any information about Willamette that would allow us to identify potential synergies in excess of this amount. We are prepared to meet with you at any time to discuss any information that you have regarding synergies achievable in the context of a business combination today. Sincerely yours, /s/ Steven R. Rogel Steven R. Rogel Chairman, President and Chief Executive Officer cc: Board of Directors, Willamette Industries, Inc. Weyerhaeuser Company, one of the world's largest integrated forest products companies, was incorporated in 1900. In 2000, sales were $16 billion. It has offices or operations in 17 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities. Additional information about Weyerhaeuser's businesses, products and practices is available at www.weyerhaeuser.com.