Equity Firm Acquires MeadWestvaco Papers
STAMFORD, CT—Investment firm Cerberus Capital Management has reached a definitive agreement to acquire MeadWestvaco's papers business and associated assets for $2.3 billion.
As part of the deal, the Cerberus-led company will acquire mills located in five states, with a combined annual capacity of approximately 2.05 million tons of coated paper, 290,000 tons of carbonless paper and 110,000 tons of uncoated paper. The sale also includes 900,000 acres of forestlands in six states that serve these mills.
According to John Luke Jr., chairman and CEO of MeadWestvaco, the sale enables the company to reduce debt and add shareholder value and growth potential. It also signals MeadWestvaco's desire to concentrate on augmenting its opportunities in the global packaging markets.
"The sale monetizes the value of our efforts to create the leading coated papers franchise in North America," Luke says. "Over the last several years, we have reduced costs and gained market share in a challenging economic environment, and this sale creates a new papers business that is well positioned to compete as a standalone company."
The acquiring company will be privately held and headquartered in Dayton, OH. The current papers management team will remain intact, with Peter Vogel Jr., the president of MeadWestvaco's papers group, assuming the role of CEO. About 6,300 employees of the papers business are expected to join the new company.