MeadWestvaco Completes Sale Of U.S. Forestlands To Plum Creek

(RTTNews) - MeadWestvaco Corp. (MWV) said Friday that it has completed the agreement with Plum Creek Timber Company Inc. (PCL) whereby Plum Creek has acquired all of MeadWestvaco's U.S. forestlands and has invested in a newly formed partnership comprised of MeadWestvaco's development properties in the Charleston, South Carolina, region.

The total consideration of the deal was about $1.1 billion, and consists of $220 million in cash and $860 million in the form of a ten-year installment note that MeadWestvaco expects to monetize within the next few weeks. The aggregate value of the deal, including both parties' investments in the partnership, was about $1.5 billion.

MeadWestvaco expects to receive net proceeds of about $950 million in cash following the monetization of the installment note, of which the company expects to return $665 million to shareholders.

The company said it will determine the optimal form of shareholder returns in January 2014, following the monetization of the note. In addition, $210 million will be used to repay an outstanding term loan in order to maintain MeadWestvaco's investment grade rating and $75 million will be retained by the new partnership to fund development activities.

MeadWestvaco has retained full ownership of its oil and natural gas rights on about 191,000 acres of land in West Virginia that are located over the Marcellus Shale fairway.