What's the word on WY-PCL?

Last week, Weyerhaeuser and Plum Creek became the latest companies to join the mass-merger movement of the LBM industry, creating a combined company that will be worth billions of dollars.



The new timber, land and forest products company will have an equity value of $23 billion and lay claim to more than 13 million acres of timberland in the U.S.

Weyerhaeuser and Plum Creek executives described the deal as an exercise in synergies and shared managerial and operational strength.

Here's what some other voices from around the industry have said.

"The real outcome from this merger will be that WY becomes an even larger timber player than it was before. That's good in many ways. For example, the combined company is expected to save around $100 million on the cost side. The pair appears to be suggesting that this figure could go up over time, too. WY will also gain valuable diversification, expanding its West Coast assets a little and greatly expanding its presence on the East Coast...The all-stock deal looks like a good one all around, but investors should watch carefully once it's consummated to make sure there are no surprises." -- Reuben Gregg Brewer, Seeking Alpha

"The timing couldn't be any better either. With the slowdown in China, timber has not been an investor favorite of late. The industry had gotten a huge pick up over the years as China began to import more and more timber from Western Canada and the U.S. Northwest...The trick to really make this wait-for-the-best-prices strategy work, however, is to make sure you have enough various products and types of timberland to still cash in on off-years. The larger a timberland company is, the better it can perform year in and year out. That's why this deal is so big." -- Jim Nelson, Street Authority

"We do a lot of business with Weyerhaeuser, and I know this will substantially increase their timber holdings. They do an excellent job of managing their forest operations and creating products for our industry. I don’t know that it would be a huge impact for us, but it seems to me they’ll maintain the Weyerhaeuser name. I'm not as familiar with Plum Creek's product, but I would think that increasing their timber holdings and giving them supply would be an advantage to have that batch of raw materials to work from." -- Chris Yenrick, Smith Phillips Building Supply, as told to HBSDealer

"What most people don't know is that this land is owned by our pension funds, retirement accounts, insurance companies and other large investors. Whereas 30 or 40 years ago most of the land was owned by vertically integrated companies, today we have a model where forestland is traded back and forth just like baseball cards. It's hard to say whether this deal will have any role in changing that." -- Benjamin Hayes, Pinchot Institute for Conservation, in an email to Portland Business Journal

"Weyerhaeuser Co.’s planned all-stock acquisition of smaller rival Plum Creek Timber Co. represents a big bet that scaling up can boost profits in the heavily splintered U.S. timber industry." -- Mike Esterl, Wall Street Journal

"The optimism is appealing. Weyerhaeuser owns lots of land in the US; the land produces mostly trees; the trees are used mostly to build houses. And US housing looks pretty good...If US housing does not continue its cheery recovery, all the added leverage will do what leverage does: amplify the decline in profits." -- Financial Times