UPDATE 3-Rayonier, PotlatchDeltic to form timber products giant in $8.2 billion merger

(Adds details from the conference call, analyst comment and updates shares in paragraphs 4-6 and 13) By Katha Kalia Oct 14 (Reuters) – Rayonier and PotlatchDeltic said on Tuesday they will merge in an all-stock deal worth about $8.2 billion, including debt, to create one of North America's largest publicly traded timber and wood products companies. The merger comes as lumber markets remain volatile, whipsawed by shifting tariffs and a weak construction outlook. Prices have swung sharply this year, pressured by a cooling housing sector but recently lifted by new U.S. tariffs on softwood lumber and production cuts at North American sawmills. The combined company will own about 4.2 million acres of timberland across 11 U.S. states and operate seven wood manufacturing plants, giving it greater scale and reach. Most of the merged firm's acreage will be in the U.S. South, a region with a large softwood capacity. PotlatchDeltic's wood products platform will position the new company to benefit from a ramp-up in U.S. lumber production due to higher duties on Canadian imports and new tariffs, Rayonier CEO Mark McHugh said on a conference call. RBC Capital Markets analyst Matthew McKellar said the deal was "moderately positive," citing its scale, diversification and synergy potential, but noted Rayonier's limited experience in wood products manufacturing. Rayonier provides sustainable forest management, land management, timber products, and real estate services. Under the deal, PotlatchDeltic shareholders will get 1.7339 Rayonier shares per share, valuing PotlatchDeltic at $44.11 each. This values PotlatchDeltic at $3.41 billion, according to Reuters calculation. Rayonier shares slipped 1%, while PotlatchDeltic rose 3.6% in morning trading. The per-share value, also represents a premium of 8.25% to PotlatchDeltic's closing stock price on October 10, the last business day prior to execution of the deal, the companies said. Rayonier shareholders will own about 54% of the combined company and PotlatchDeltic investors 46%. The deal is expected to close by mid-2026. Rayonier CEO Mark McHugh will lead the new firm, with PotlatchDeltic's Eric Cremers serving as executive chair for two years. The headquarters will be in Atlanta, with regional offices in Spokane, Washington, and Wildlight, Florida. (Reporting by Katha Kalia and Arunima Kumar in Bengaluru; Editing by Leroy Leo and Saumyadeb Chakrabarty)

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