Nippon Paper Industries has signed an agreement with US based timber company Weyerhaeuser to acquire liquid packaging board business for $285m in cash.
Under the terms of the deal, Nippon Paper will acquire Weyerhaeuser's mill located in Longview, Washington. It has an annual capacity of 280,000t.
Located near ports for international shipping, the mill produces liquid packaging rolls, which are later transferred to two extruder machines that apply a polyethylene coating to the product.
The liquid packaging board is used to produce cartons and boxes for milk, juice, tea, shochu, and sake.
Weyerhaeuser president and CEO Doyle Simons said: "This transaction creates significant value for Weyerhaeuser shareholders and enhances the focus of our portfolio as we work to be the world's premier timber, land, and forest products company."
Weyerhaeuser plans to use the sale proceeds for repayment of debt.
Nippon Paper said that the acquisition is a part of its effort to strengthen and expand its packaging business.
Additionally, the deal will allow Nippon's Paper-pack business to establish an integrated production system from base paper to processing.
Subject to customary closing conditions, including regulatory review, the deal is planned to be completed in the third quarter 2016.
Weyerhaeuser is currently undertaking strategic review for printing papers joint venture.
