Brookfield Asset Management (BAM) is selling Longview Timber – approximately 645,000 acres of timberland in the US Pacific Northwest – to real estate investment trust Weyerhaeuser, the Toronto-based asset manager said in a statement.
Weyerhaeuser is paying $2.65 billion including assumption of debt to acquire 100 percent of the asset, which is owned by BAM, Brookfield Infrastructure Partners (BIP) and Brookfield’s institutional investor clients through the company’s Global Timber Fund.
“After repayment of debt and distribution of proceeds to private fund investors, net cash proceeds to Brookfield will be approximately $600 million, on account of its investment,” the asset manager said in a statement.
Net proceeds for BIP will total approximately $470 million. This is in addition to $170 million the fund generated in net proceeds from the June 7 sale of the remainder of its Canadian BC Coastal timberland operations.
“The sale of our timberland assets was an opportunity to further our strategy of monetising lower yielding assets to recycle capital into our utilities, transport and energy businesses,” BIP chief executive Sam Pollock said in the statement. The publicly-listed fund had announced last year that it was considering selling its timber assets in order to refocus on core infrastructure.
Its asset manager, however, BAM, is not ruling out future investments in the asset class. “Although we are selling our Longview timber assets, we believe that timberland investments provide significant benefits to institutional investment portfolios and have a strong long-term potential for growth,” said Reid Carter, managing partner of Brookfield Timberlands.
Brookfield Asset Management, which has more than $175 billion in assets under management, focuses on property, renewable power, infrastructure, and private equity. Brookfield Infrastructure has $20 billion in capital.
Publicly-listed Weyerhaeuser owns or controls more than six million acres of timberlands, primarily in the US. The company manages another 13.9 million acres in Canada under long-term licenses.