Weyerhaeuser said Tuesday its board has approved a conversion of the forest products giant into a real estate investment trust, letting the company take advantage of certain tax benefits.
The Federal Way, Wash., company said the conversion may occur as soon as next year, depending on the economic recovery and changes in tax policy.
"This conversion will position us to be more competitive in our timberlands business," Dan Fulton, president and CEO, said in a statement. "In addition, we are able to convert with our existing business mix of timberlands, wood products, cellulose fibers and real estate."
Weyerhaeuser has been under pressure for years to lower its taxes by becoming a REIT. It said it plans to pay a significant portion of dividends in stock.
Under its conversion into a REIT, the company must issue shareholders a special, taxable dividend of its earnings by the end of the year of conversion. Weyerhaeuser pegged its 2010 profit at just under $6 billion.
The company also announced it will ask shareholders at its annual meeting in April to approve changes in its structure, eliminating its classified board and removing super majority voting provisions.
In premarket trading, Weyerhaeuser shares traded up $2.14, or 5 percent, at $44.65. The stock has ranged from $18.67 to $44.02 over the past year.
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