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International Paper to Sell U.S. Forestland

April 05, 2006|From the Associated Press

STAMFORD, Conn. — International Paper Co., the world's largest forest products company, announced an agreement Tuesday to sell about 5.1 million acres of forestland for $6.1 billion to two investor groups.

The sale is part of the Stamford, Conn.-based paper company's plan to focus on uncoated papers and industrial and consumer packaging.

International Paper said it would sell about 3.8 million acres of forestlands located across the southern U.S. and 440,000 acres in Michigan to an investor group led by Resource Management Service for about $5 billion in cash and notes.

Under a separate agreement, International Paper will sell about 900,000 acres of forestland in Louisiana, Texas and Arkansas to an investor group led by TimberStar for approximately $1.1 billion in cash and notes.

Including sales to conservation groups announced last week, International Paper will have sold 5.4 million acres, or approximately 85% of its U.S. forestland holdings, for $6.5 billion.

The company believes these combined transactions represent the largest private forestland sale in U.S. history.

International Paper also is exploring the sale of about 300,000 acres, principally in New York.

International Paper's remaining acreage, approximately 830,000 acres primarily in the South, will be retained by the company and some may be later sold to maximize the value of the land.

Its shares rose 18 cents to $34.90.

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