Lumber Giants Intertwine in $7 Billion Deal

Big(ger) Timber. Much bigger timber. 

On Tuesday, timberland giant Rayonier announced it would acquire fellow industry heavyweight PotlatchDeltic in an all-stock deal that values the combined company at $7.1 billion, or $8.2 billion including debt. The marriage, billed as a merger of equals, builds one of the largest lumber companies in the US and comes on the exact same day as a new round of lumber tariffs.

Timber!!

So far, 2025 has been one of the choppiest years ever for the business of wood. Weighing on one side of the whipsaw: tariffs and broader trade war uncertainty. Prices have generally risen and fallen due to the on-again, off-again nature of import duties on Canadian wood. On the other side: crashing demand, as sustained high-interest rates kept the housing market petrified in amber; in fact, the cost of two-by-four wood planks was one of the first assets to experience significant price inflation amid the pandemic, and one of the first to see significant price declines amid the Federal Reserve’s subsequent rate-hiking campaign.

In September, just ahead of the Fed’s first rate cut this year, lumber futures had plummeted 24% from a three-year high in August to the lowest level in seven months. In a letter to the White House, the US Lumber Coalition described “the worst market conditions” its members have ever seen. On Tuesday, a new batch of tariffs is hitting imported lumber and wood products. The tariffs are expected to rock Canada’s lumber industry, with softwood lumber now under an effective rate of 45%. For Rayonier and PotlatchDeltic, which both operate as REITs, the protectionism could help bolster a nationwide wood empire:

• Together, the two companies will own 4.2 million acres of timberland across 11 states, as well as seven wood product manufacturing sites and six lumber mills. The merger will create “significant strategic and financial benefits beyond what either of us could achieve independently,” PotlatchDeltic CEO Eric Cremers said on a conference call Tuesday.
• That places its timberland reach in the US as second only to Weyerhaeuser, the largest private landowner in the country, with control of over 10 million acres. 

Where The Sun Does Shine: Lumber isn’t the only renewable resource coveted by both companies. Rayonier and PotlatchDeltic have also each leased tens of thousands of acres of land to solar farm developers, with the deals at rates likely to be 10 times more profitable than for growing pine trees, according to a report in The Wall Street Journal.