The birth of the second largest listed timber company in North America! Rayonier Inc. (RYN.US) and PotlatchDeltic (PCH.US) have reached a $7.1 billion merger.

Rayonier Inc. (RYN.US) and PotlatchDeltic Corp. (PCH.US) have reached a business merger agreement to jointly establish a large American timberland holding and wood production company with a market value of $7.1 billion. The transaction will create the second largest publicly traded lumber and wood products company in North America, with land resources spanning 11 states and totaling 4.2 million acres. In a statement released on Tuesday, both companies announced that the all-stock deal will result in Rayonier Inc. shareholders owning 54% of the new entity, with President and CEO Mark McHugh leading the merged company. PotlatchDeltic's current President and CEO Eric Cremers will serve as the new company's executive chairman for a term of 24 months after the completion of the transaction. The new company will adopt a new name and be headquartered in Atlanta, Georgia, while maintaining important regional offices in Spokane, Washington, and Wildlight, Florida. The stock exchange ratio for this transaction represents an 8.25% premium over PotlatchDeltic's closing price on October 10th. The transaction has received unanimous approval from the boards of both companies. On the same day the deal was announced, the wide-ranging tariff policy on imported lumber and wood products by U.S. President Trump officially took effect, aiming to boost domestic manufacturing in the United States. This policy is expected to have a direct impact on Canada, the largest supplier of lumber to the U.S. The Washington-based lobbying group, the U.S. Lumber Coalition, highlighted in a letter to Trump administration officials last month that lumber suppliers are facing what some describe as the "most challenging market conditions in history." The group stated that apart from weak demand for new housing, the industry is also grappling with a "severe oversupply" due to Canadian and European producers rushing to ship out goods earlier in the year to avoid potential tariff increases. Cremers stated in the announcement that the merger will "create significant strategic and financial benefits that each company could not achieve independently."