Santa Fe Southern Pacific Corp. has agreed to sell its timber subsidiary, Kirby Forest Industries, to Louisiana-Pacific Corp. for $315 million, the firms announced Wednesday.
The move requires the approval of the boards of both companies, the Federal Trade Commission and the Justice Department. The sale also is contingent on both sides reaching a final purchase agreement.
“Kirby is having a good year,” said John J. Schmidt, chairman of Chicago-based Santa Fe Southern Pacific, a holding company in railroads, energy, real estate, minerals, pipelines, forest products and construction, “but in the long run it does not fit well in our portfolio of companies.”
“It will be a better fit in a company like Louisiana-Pacific, which has a larger commitment to the forest products industry.”
Not included in the proposed sale are 520,000 acres of timberland in Northern California.
Kirby Forest Industries owns about 650,000 acres of timberland in East Texas and Louisiana and three plants that manufacture plywood, lumber and particleboard.
“Kirby’s timber and timberland will be of great value to L-P’s manufacturing facilities in the region,” said Harry A. Merlo, chairman and president of Louisiana-Pacific, a Portland-based forest products company with 120 plants and mills in 23 states.