Wednesday, November 01, 2006

Corporate Shell Game: International Paper Completes Land Sale

On October 30th, International Paper (NYSE: IP) completed the sale of 900,000 acres in Louisiana, Arkansas, and Texas to TimberStar Southwest, a Timberland Investment Management Operation - TIMO, for $1.13 billion. IP's total landsales in 2006 originally announced in April, totals 5.1 million acres and also includes the company Resource Management Services, another TIMO.

This marks the largest divestment of land by a timber company in the history of US forestry. IP however retains logging rights for from 30-50 years and the sale itself basically serves as a tax shelter saving the company millions and allowing them to pay down debt they have accrued from mergers with companies like Champion, Union Camp, Ilim (Russia), and more.

IP's sale matches a current industry trend in which most companies in the Southern US are selling off to TIMOs and private land managers. Other companies that have done this include Georgia Pacific and Bowater, and MeadWestvaco recently announced they would likely follow suit.

To learn more about the original sale, visit the story on the Dogwood Alliance website, here.

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