2009-08-31 - Gunns announces acquisition of ITC Timber Today, Gunns Limited announced the acquisition of ITC Timber Pty Ltd, a subsidiary of Elders Limited, which owns the sawmilling assets and 50% of the Smartfibre joint venture, for a value of $100 million. The acquisition represents a logical combination of two complementary businesses. Conditions to closing the acquisition are ACCC clearance and also VicFORESTS consent. For the Australian market and for our international customers, there is a compelling strategic fit in terms of our market offer and also significant value creation from potential synergies in manufacturing and channels to market. The Gunns Timber Products and ITC Timber businesses have complementary hardwood operations with a combined total solid wood conversion capacity of 500,000m3 log-in p.a.  Both businesses have considerable market presence across Australia, particularly in Victoria and Tasmania as well as across Southeast Asia, including China and are considered complementary in terms of major product mix focus from the two former manufacturing divisions. ITC Hardwood generated approximately $65 million of revenue in FY2009.  Acquisition also includes two manufacturing locations located in Victoria, two in Tasmania and the Smartfibre joint venture business (with FEA) which exports hardwood chips. The merged Gunns/ ITC Timber Products business will have aggregated revenue of $320 million. We will be working diligently over the coming months to ensure a seamless transition to our new joined businesses and ensure an optimum level of service to all of our customers during this time. We believe this is a significant step towards achieving a sustainable and profitable sawmilling business in the Australian market and presenting improved value to our shareholders, customers and employees over the medium to longer term. Thank you for your support to date and we look forward to meeting your Australian hardwood and softwood timber requirements in the coming decades. Yours faithfully, Gunns Timber Products Christine Briggs General Manager - Sales & Distribution

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