8-K

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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K




CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                                      1934

                         DATE OF REPORT -- JULY 29, 1999




                          COMMISSION FILE NUMBER 1-6780


                                  RAYONIER INC.



                   Incorporated in the State of North Carolina
                I.R.S. Employer Identification Number l3-2607329


              l177 Summer Street, Stamford, Connecticut 06905-5529
                          (Principal Executive Office)

                        Telephone Number: (203) 348-7000




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                                  RAYONIER INC.

                                TABLE OF CONTENTS






                                                                            PAGE


              Item 5.      Other Events                                       1

              Item 7.      Financial Statements and Exhibits                  1

                           Signature                                          1

                           Exhibit Index                                      2




                                      i
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ITEM 5.  OTHER EVENTS

Incorporated by reference is a news release issued by the Registrant on July 29,
1999, attached as Exhibit 99.




ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

         (c)  See Exhibit Index







                                    SIGNATURE


         Pursuant to the requirements of the Securities Exchange Act of l934,
         the registrant has duly caused this Report to be signed on its behalf
         by the undersigned hereunto duly authorized.


                                              RAYONIER INC.  (Registrant)


                                              BY    George C. Kay
                                                    George C. Kay
                                                    Vice President and
                                                    Corporate Controller
July 29, 1999






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                                  EXHIBIT INDEX



EXHIBIT NO.                        DESCRIPTION                    LOCATION
- -----------                        -----------                    --------


    99                            News Release issued            Filed herewith
                                  July 29, 1999









                                       -2-

EX-99

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[RAYONIER LETTERHEAD]                                                 EXHIBIT 99


FOR RELEASE AT 8:00 A.M. E.D.T.         For further information
THURSDAY, JULY 29, 1999                 Media Contact:     Martin H. Arnold
                                                           203-964-4621
                                        Investor Contact:  John A. Doumlele
                                                           203-964-4486


                 RAYONIER PURCHASES 980,000 ACRES OF TIMBERLAND
                      IN SOUTHEAST U.S. FROM SMURFIT-STONE


         STAMFORD, CT, July 29, 1999 - Rayonier (NYSE: RYN) announced today it
has signed a definitive agreement to purchase approximately 980,000 acres of
timberland in Florida, Georgia and Alabama from Smurfit-Stone Container
Corporation (Nasdaq: SSCC) for $725 million.

         The purchase will more than double Rayonier's current timber holdings
in the Southeast U.S. to 1.8 million acres. It will increase the total amount of
timber the company owns or manages to nearly 2.5 million acres, including
400,000 acres in the Northwest U.S. and 250,000 acres in New Zealand.

         The Boards of Directors of both companies have approved the
transaction, which is expected to close early in the fourth quarter. Rayonier
indicated that it will finance the acquisition with $225 million in cash and
$500 million in pre-committed long-term notes to be issued by a wholly owned
Rayonier partnership that will hold all of the company's U.S. timberlands.

         Lee Nutter, who on January 1, 1999 became Rayonier Chairman, President
and CEO, said: "This acquisition is a major step in repositioning Rayonier as a
leading owner and manager of timberlands. Our goal is to increase shareholder
value by capitalizing on our core strengths, and timberland ownership and
management is our largest business. We intend to be the premier producer in each
of our core businesses with the critical mass to be a leader."

         Nutter said the timberlands are high quality and provide excellent
synergy with the company's existing acreage in Northern Florida and Southern
Georgia, where it has owned timber for more than 60 years. "To a large extent
these properties are adjacent or intermingled with our holdings, so we know them
very well," Nutter said. "The Alabama properties give us a
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significant presence in an attractive growing region near our current
operations. All in all, it is a unique opportunity for Rayonier and our
shareholders."

         The forests are primarily pine plantation - 700,000 acres in Northern
Florida and Southern Georgia and 280,000 acres in Alabama - and will increase
Rayonier's annual Southeast harvest from 2 million tons to 5 million.

         Rayonier said it would be able to add value to the tracts through its
timber auction process, which it first established in 1985 when it formed a
publicly held timberland master limited partnership.

         "The auction market has allowed us to substantially increase the
realization for our timber base by selling timber harvest rights to the highest
value user," Nutter said. "Smurfit-Stone managed the timberlands primarily to
supply its containerboard mills. By operating the Smurfit timberlands as we do
our own, and by eliminating overlapping marketing and management costs, we
expect to realize approximately $20 million per year in operating benefits. At
existing prices, we believe the acquisition properties will contribute
approximately $70 million to EBITDA."

         Under terms of the deal, Smurfit-Stone agreed to purchase 1.8 million
tons of wood per year at market prices for two years to supply its mills. This
will allow a smooth transition to a full auction market, Nutter said.

         Gerald Pollack, Rayonier Senior Vice President and Chief Financial
Officer said: "The timberlands business is unique because of the high margins,
strong cash flows and growth in value over time. The price is attractive at less
than $750 an acre and the transaction will be immediately accretive to Rayonier
on a cash flow from operations basis, although the transaction, as is typical of
timberland acquisitions, is initially expected to be earnings dilutive. Assuming
an early fourth-quarter closing, the after-tax earnings dilution in the fourth
quarter is estimated at 18 cents per share.

         Pollack said the company is looking at ways to highlight the value of
its U.S. timberlands to investors, provide access to lower cost capital through
a timberland equity offering to finance further growth, and increase cash flow
to Rayonier shareholders over time, and to mitigate dilution. He said Rayonier
is considering a REIT, a timberlands master limited partnership, and other
equity alternatives as the next step in Rayonier's corporate repositioning.
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         "Proceeds from a timberland equity offering could be used to reduce
debt, provide funds for additional acquisitions, and return cash to
shareholders," Pollack said. "We want to retain our strong balance sheet and are
committed to maintaining our investment-grade rating as we pursue growth
opportunities."

         Rayonier is a global supplier of specialty pulps, timber and wood
products. The company has 1.5 million acres of timber in the U.S. and New
Zealand. About half of Rayonier's sales are to customers in 60 countries.

         Comments about anticipated results and future activities are
forward-looking and are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Changes in the following
important factors, among others, could cause actual results to differ materially
from those expressed in the forward-looking statements: failure of one or more
conditions to closing the acquisition of the Smurfit-Stone timberlands to be
satisfied; fluctuations in demand for logs produced from the Company's
timberlands; the effect of such fluctuations on the Company's timber sales, and
other factors listed in the Company's release announcing its earnings for the
second quarter of 1999.

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