Merging timber giants

  • Monday, February 11, 2002 9:00pm
  • Business

Associated Press

SEATTLE – For 14 months, Weyerhaeuser’s chief executive mounted an aggressive hostile takeover bid for his chief rival and former employer, Willamette Industries – only to be met with cold corporate rejection and defiant employees sporting “Just Say No Wey” buttons.

With the deal formally approved by shareholders Monday, chief executive Steve Rogel said he was ready to put the past behind him – and optimistic Willamette employees were ready to follow suit.

“The basic message we have back from Willamette is, ‘The deal’s over now. We’re Weyerhaeuser – let’s get on with it,’ ” Rogel said in an interview.

Rogel appeared to only barely be savoring the victory.

“It really feels good,” he allowed, but quickly added: “We’re looking forward to moving ahead. It’s been 14 months of standing in place as we tried to bring the deal to conclusion, but now … we’ve got the opportunity to move forward.”

Earlier Monday, Federal Way-based Weyerhaeuser said shareholders holding 97 percent of Willamette’s stock agreed to Weyerhaeuser’s offer to buy Willamette for $55.50 per share, making Portland, Ore.-based Willamette officially a wholly owned subsidiary of Weyerhaeuser.

Last month, Willamette’s board finally gave in to the $6.2 billion acquisition offer after more than a year of bitter resistance – and only after more than 60 percent of shareholders had told Weyerhaeuser they were in favor of the deal.

Opposition was led by Willamette chairman William Swindells Jr., grandson of a company co-founder. Swindells had groomed Rogel to take over as chief executive officer – until Rogel left in 1997 to become Weyerhaeuser’s chairman and immediately offered to buy his former company.

Weyerhaeuser also has agreed to assume about $1.7 billion of Willamette’s debt.

But now comes the hard part.

On Monday, Rogel held his first in-depth meetings with Willamette employees – to “emphasize the positive aspects of the acquisition,” he said.

Rich Hanson, the Weyerhaeuser senior vice president who will lead efforts to integrate Willamette, said the company would talk broadly about forming integration teams. He conceded it would be a hard day for many at Willamette.

“I think everybody shared the feeling of loss – the loss of identity – and I think you have to be empathetic about that,” Hanson said. “The only thing we can really do is give people straight answers … and focus on what we can become.”

Both Rogel and Hanson insist Willamette employees will have a say in how the new company operates.

“We’re going to make sure we’re not simply creating a larger Weyerhaeuser,” Hanson said.

Weyerhaeuser has said the companies could save $300 million by merging resources, although Rogel said he does not expect widespread layoffs.

Some positions will be eliminated, especially in administrative units, Hanson said, although it’s too early to know where or how many.

The company also may not know for several months whether certain Willamette operations will close, including Willamette’s Portland headquarters.

The combined company has nearly 63,000 employees and controls nearly 40 million acres of forest land.

The companies hope to be fully integrated within a year, Hanson said.

Timber analyst Steve Chercover with D.A. Davidson said the transition would probably be easier for Willamette’s mill workers than its executives.

“At the end of the day or the end of the week what the people in the mills are looking for is a steady paycheck, and they’re not as concerned with whose name is on the smokestack,” he said.

The deal comes as the timber industry is in a slump, hurt by weakened demand, environmental regulations and a general economic downturn. Rogel said the weak economy is an argument for, rather than against, such a costly acquisition.

“The things that are happening in the economy are the drivers for consolidation in our industry,” he said. “There’s too much capacity and too many players in markets.”

Copyright ©2002 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

A closing sign hangs above the entrance of the Big Lots at Evergreen and Madison on Monday, July 22, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Big Lots announces it will shutter Everett and Lynnwood stores

The Marysville store will remain open for now. The retailer reported declining sales in the first quarter of the year.

George Montemor poses for a photo in front of his office in Lynnwood, Washington on Tuesday, July 30, 2024.  (Annie Barker / The Herald)
Despite high mortgage rates, Snohomish County home market still competitive

Snohomish County homes priced from $550K to $850K are pulling in multiple offers and selling quickly.

Henry M. Jackson High School’s robotic team, Jack in the Bot, shake hands at the 2024 Indiana Robotics Invitational.(Henry M. Jackson High School)
Mill Creek robotics team — Jack in the Bot — wins big

Henry M. Jackson High School students took first place at the Indiana Robotic Invitational for the second year in a row.

The computer science and robotics and artificial intelligence department faculty includes (left to right) faculty department head Allison Obourn; Dean Carey Schroyer; Ishaani Priyadarshini; ROBAI department head Sirine Maalej and Charlene Lugli. PHOTO: Arutyun Sargsyan / Edmonds College.
Edmonds College to offer 2 new four-year degree programs

The college is accepting applications for bachelor programs in computer science as well as robotics and artificial intelligence.

FILE — Boeing 737 MAX8 airplanes on the assembly line at the Boeing plant in Renton, Wash., on March 27, 2019. Boeing said on Wednesday, Feb. 21, 2024, that it was shaking up the leadership in its commercial airplanes unit after a harrowing incident last month during which a piece fell off a 737 Max 9 jet in flight. (Ruth Fremson/The New York Times)
Federal judge rejects Boeing’s guilty plea related to 737 Max crashes

The plea agreement included a fine of up to $487 million and three years of probation.

Neetha Hsu practices a command with Marley, left, and Andie Holsten practices with Oshie, right, during a puppy training class at The Everett Zoom Room in Everett, Washington on Wednesday, July 3, 2024. (Annie Barker / The Herald)
Tricks of the trade: New Everett dog training gym is a people-pleaser

Everett Zoom Room offers training for puppies, dogs and their owners: “We don’t train dogs, we train the people who love them.”

Andy Bronson/ The Herald 

Everett mayor Ray Stephenson looks over the city on Tuesday, Jan. 5, 2015 in Everett, Wa. Stephanson sees  Utah’s “housing first” model – dealing with homelessness first before tackling related issues – is one Everett and Snohomish County should adopt.

Local:issuesStephanson

Shot on: 1/5/16
Economic Alliance taps former Everett mayor as CEO

Ray Stephanson will serve as the interim leader of the Snohomish County group.

Molbak's Garden + Home in Woodinville, Washington will close on Jan. 28. (Photo courtesy of Molbak's)
After tumultuous year, Molbak’s is being demolished in Woodinville

The beloved garden store closed in January. And a fundraising initiative to revitalize the space fell short.

Everett Mayor Cassie Franklin, Advanced Manufacturing Skills Center executive director Larry Cluphf, Boeing Director of manufacturing and safety Cameron Myers, Edmonds College President Amit Singh, U.S. Rep. Rick Larsen, and Snohomish County Executive Dave Somers participate in a ribbon-cutting ceremony on Tuesday, July 2 celebrating the opening of a new fuselage training lab at Paine Field. Credit: Arutyun Sargsyan / Edmonds College
‘Magic happens’: Paine Field aerospace center dedicates new hands-on lab

Last month, Edmonds College officials cut the ribbon on a new training lab — a section of a 12-ton Boeing 767 tanker.

Gov. Jay Inslee presents CEO Fredrik Hellstrom with the Swedish flag during a grand opening ceremony for Sweden-based Echandia on Tuesday, July 30, 2024, in Marysville, Washington. (Ryan Berry / The Herald)
Swedish battery maker opens first U.S. facility in Marysville

Echandia’s marine battery systems power everything from tug boats to passenger and car ferries.

Helion Energy CEO and co-founder David Kirtley talks to Governor Jay Inslee about Trenta, Helion’s 6th fusion prototype, during a tour of their facility on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
State grants Everett-based Helion a fusion energy license

The permit allows Helion to use radioactive materials to operate the company’s fusion generator.

People walk past the new J.sweets storefront in Alderwood Mall on Thursday, July 25, 2024, in Lynnwood, Washington. (Olivia Vanni / The Herald)
New Japanese-style sweets shop to open in Lynnwood

J. Sweets, offering traditional Japanese and western style treats opens, could open by early August at the Alderwood mall.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.