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.”
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