Japanese paper manufacturing company Nippon Paper Industries has agreed to buy US-based Weyerhaeuser Company’s liquid packaging board business for $285m in cash.

Weyerhaeuser, which owns more than 13 million acres of timberlands, will use part of the estimated $225m after-tax proceeds to repay its debt.

The deal includes the acquisition of a mill located in Longview, Washington, US, with an annual capacity of 280,000t.

"This transaction creates significant value for Weyerhaeuser shareholders and enhances the focus of our portfolio."

Subject to customary closing conditions, the deal is expected to close in the third quarter of this year.

Weyerhaeuser Company president and chief executive officer Doyle Simons said: "This transaction creates significant value for Weyerhaeuser shareholders and enhances the focus of our portfolio as we work to be the world’s premier timber, land, and forest products company."

Until the closing of the deal, Weyerhaeuser liquid packaging board mill and Nippon Paper Industries will continue to operate separately.

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Weyerhaeuser is currently reviewing its printing papers joint venture.

Last month, the company announced a deal to sell its cellulose fibres pulp mills to International Paper for $2.2bn in cash.

The sell includes five pulp mills located in Columbus, Mississippi; Flint River, Georgia; New Bern, North Carolina; Port Wentworth, Georgia, US and Grande Prairie, Alberta, Canada, with a combined total capacity of around 1.9 million metric tons.

The sale also involves two modified fibre mills in Columbus, Mississippi, US, and Gdansk, Poland.

The deal marked the completion of the first phase of Weyerhaeuser’s strategic review of the cellulose fibres business, which began last November.