Plum Creek Timber, one of the nation’s largest landowners, is acquiring all of MeadWestvaco’s U.S. forestlands and investing in the company’s Summerville-based development group as part of a billion-dollar deal announced Monday.
The $1.1 billion purchase agreement includes all the forestlands and certain related assets, totaling about 501,000 acres spread across five states, including 200,000 in South Carolina, according to MeadWestvaco officials.
Plum Creek Timber is also partnering with MeadWestvaco’s Summerville-based real estate business. That deal includes Plum Creek paying $152 million for an ownership stake in about 109,000 acres of development property in the Charleston region.
“This transaction delivers on all of our objectives — it enables us to maximize the value of our land holdings in a tax-efficient manner, while retaining the substantial upside potential of the attractive real estate opportunities in the growing Charleston market,” said John A. Luke Jr., chairman and CEO of MWV. “At the same time, we are maintaining a secure source of fiber for our mills.”
Earlier this year, MeadWestvaco announced plans to seek a partner to help it “unlock the value” of its real estate business and the acreage it oversees.
The Richmond, Va.-based company has been shifting away from its paper-making business. Because of that, it no longer needs as much property, though it typically retains timber rights for land it sells.
Plum Creek’s joint venture with MWV Community Development and Land Management is broken into two segments.
The first has MWV holding 95 percent interest and Plum Creek with the remaining five percent in “active developments” such as Nexton, a massive residential and commercial real estate project near Summerville. The company is also building several business parks around the Lowcountry, in addition to the 72,000-acre East Edisto, which has been described as a 50-year, mixed-use project where western Charleston County bumps up against Dorchester County.
The second partnership between the two companies deal with “long-term development projects” that are split 50-50 by the two, officials said.
Ken Seeger, president of MWV Community Development and Land Management, called the deal a “win-win.”
“Plum Creek is a stable owner that cares about sustainability, and I think the land is in good hands and they’re also a very substantial partner to have in our development business,” Seeger said.
The deal is not expected to affect MeadWestvaco’s Summerville operations, Seeger added.
He estimated his division has sold about 500,000 to 600,000 acres since it was created six years ago. About half of the remaining acreage it manages is in South Carolina.
“They understand and appreciate our commitments in the Charleston community, and we are very happy that they have chosen to invest in us,” Seeger said.
Plum Creek Timber is touted as one of the nation’s largest private landowners. As of 2012, Plum Creek owned about 6.4 million acres of timberlands in 19 states, including 177,000 in South Carolina, according to its website.