Weyerhaeuser Says They Are Still Interested in Willamette
Press release from the issuing company
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
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
/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.
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