International Paper Company has agreed to sell 1.1 million acres of woodlands in Maine and New Hampshire to GMO Renewable Resources, a timberland investment company for $250 million, one of the largest land deals in Maine in recent years.
International Paper, based in Stamford, Connecticut, intends to sell of its woodlands in the two states by early 2005. The world's largest forest products company, IP is the second largest landowner in Maine, behind Irving.
Most of the woodlands involved being sold are in Maine, the largest parcels in Hancock and Washington counties, and along the Canadian border in Franklin and Oxford counties. The total acreage to be sold in Maine amounts to nearly 5 percent of the state, or five times the size of Baxter State Park. The sale includes an additional 24,000 acres in New Hampshire.
This sale makes IP the most recent papermaker to divest its timber holdings in Maine. The past six years has seen the sale of woodlands belonging to Georgia-Pacific, Bowater, MeadWestvaco, and Sappi.
"Our decision to sell these forestlands is based on achieving a superior value for our forest lands while maintaining our ability to provide for the wood fiber needs of our two Maine mills," said George O'Brien, IP's senior vice president of forest products.
News of the sale has conservation land grabbers pushing for renewed investment in Land for Maine's Future. The program ran out of money in January, and a legislative effort to fund the program through a bond issue was unsuccessful.
Maine Conservation Commissioner Patrick McGowan said when the IP sale is completed, more than 6 million acres of timberlands will have changed hands since 1998.
"That's an alarming trend when we look at 50 years of stable ownership," McGowan said. "It gives people a lot of anxiety."
IP was the first paper and forest products company in North America to formalize an agreement with NatureServe, a non-profit conservation group, to identify, protect and manage "Forests with Exceptional Conservation Value."
GMO Renewable Resources is the timberlands investment division of GMO LLC, a privately held global investment company based in Boston. Under the agreement, the company will own the land and supply timber to IP for its mills in Bucksport and Jay.
Bob Saul, director of domestic investments for GMO Renewable Resources, said, "We are very pleased to have entered into this agreement with International Paper. These are some of the most productive, well-managed forestlands in the Northeast. In addition to growing trees for the paper, packaging and wood products markets, we look forward to optimizing the value of this high-quality wood resource and managing the lands as a sustainable working forest. We also hope to build upon our strong relationship with the conservation community to keep this valuable forest resource intact."
IP says that it intends to continue to operate its mills in Maine, and that no jobs will be affected by the sale. The company employs 75 foresters in the state, as well as about 1,900 employees at its mills in Jay and Bucksport.
A spokesman for GMO says that it will maintain open access to the land for traditional uses, including hunting, fishing, snowmobiling, and other recreational activities. It is uncertain how, or whether leaseholders will be affected by the sale.
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