Koch Industries to
Acquire Georgia-Pacific for $48 Per Share in Cash
Transaction, subject to completion, valued at $21 billion,
including debt
http://www.gp.com/center/news/news.asp?NewsID=4501
* Georgia-Pacific and
Koch Industries boards unanimously approve $48/share offer
* Georgia-Pacific to become a privately held, wholly owned
subsidiary of Koch Industries
* Koch Industries expecting to commence cash tender offer for
Georgia-Pacific shares this week
* The company will continue to operate as Georgia-Pacific from
its Atlanta headquarters
ATLANTA / WICHITA, Kan. - Georgia-Pacific Corp. (NYSE: GP) and
Koch Industries, Inc., today announced they have reached a
definitive agreement for Koch Forest Products, Inc., a wholly
owned Koch subsidiary, to make a $48 per share cash tender offer
for all shares of Georgia-Pacific. The transaction has been
unanimously approved by the boards of directors of
Georgia-Pacific and Koch.
The transaction has an equity value of $13.2 billion and a total
enterprise value of $21 billion, including all Georgia-Pacific
debt. The price to Georgia-Pacific shareholders represents a
premium of 39 percent based on the closing price of
Georgia-Pacific common stock on Nov. 11.
Koch Forest Products expects to launch a cash tender offer for
all outstanding shares of Georgia-Pacific common stock no later
than Nov. 18, followed by a second step cash-out merger at the
offer price. The closing of the tender offer is expected to be
completed promptly, subject to customary closing conditions,
including antitrust clearances in various countries.
The transaction is not conditioned on financing. Debt financing
has been secured by Koch through Citigroup.
Koch has confirmed that Georgia-Pacific will be operated as a
privately held, wholly owned subsidiary of Koch Industries.
Georgia-Pacific will continue to do business worldwide under the
Georgia-Pacific name and continue to operate its businesses from
its Atlanta headquarters as an independently managed company.
Included in the transaction are all assets of Georgia-Pacific,
including its North America and international consumer products
segments, as well as its building products, packaging, and paper
and bleached board segments.
"This transaction is the most dramatic step yet in
Georgia-Pacific's history and its transformation. We are pleased
it offers very significant, incremental value to our
shareholders, as is warranted by our company's tremendous assets
and talented employees," said A.D. "Pete" Correll,
Georgia-Pacific chairman and chief executive officer.
"Koch's acquisition of Georgia-Pacific will enable us to
move into the future in an exciting fashion and continue
achieving our financial and operating goals with committed new
ownership that is exceptionally strong financially, has a long
history of outstanding business success and a dedication to
operational excellence."
"Georgia-Pacific is an outstanding company with highly
talented employees, a heritage of leadership in the marketplace
and strong branded products," said Charles G. Koch, chairman
and chief executive officer of Koch Industries, Inc. "By
joining our group of privately held companies, Georgia-Pacific
will be able to maintain a long-term focus on growth and a
commitment to delivering value for all of its constituents. As a
wholly owned Koch subsidiary, it will benefit from our historical
practice of reinvesting up to 90 percent of earnings in our
businesses. We have extensive experience with cyclical, highly
competitive businesses and the ability to commit appropriate
resources to enhance the company's assets and pursue a growth
agenda."
Koch acquired Georgia-Pacific's non-integrated market and fluff
pulp operations at New Augusta, Miss., and Brunswick, Ga., in May
2004. Since the purchase, Koch has invested in these businesses,
which have been operating as Koch Cellulose. Upon completion of
this transaction, these operations will be reintegrated with
Georgia-Pacific businesses.
"Through the experience we gained in our recent transaction
with Koch, we are very familiar with Koch's outstanding strategic
asset management approach and capabilities," Correll said.
"It is gratifying that the same highly effective leadership
team we dealt with earlier took a focused interest in all of
Georgia-Pacific and in our continuing success story as an
industry leader. We are confident that this combination will be a
winner, bringing superior strengths, shared core values and
readiness to compete in all of our markets."
Added Koch's Joe W. Moeller, president and chief operating
officer, "We view this major acquisition not only as a key
strategic investment for Koch but as a platform for future
growth. We believe this transaction represents a unique
opportunity in which each of our enterprises and employees will
be able to prosper together."
Goldman, Sachs & Co. acted as exclusive financial advisor to
Georgia-Pacific; the company's legal counsel are Shearman &
Sterling LLP and King & Spalding LLP. Koch's financial
advisor is Citigroup Corporate and Investment Banking; its
transaction counsel is Latham & Watkins LLP.
Headquartered at Atlanta, Georgia-Pacific is one of the world's
leading manufacturers and marketers of tissue, packaging, paper,
building products and related chemicals. With 2004 annual sales
of approximately $20 billion, the company employs 55,000 people
at more than 300 locations in North America and Europe. Its
familiar consumer tissue brands include Quilted Northern?, Angel
Soft?, Brawny?, Sparkle?, Soft 'n Gentle?, Mardi Gras?, Vanity
Fair? and Lotus?, as well as the Dixie? brand of disposable cups,
plates and cutlery. Georgia-Pacific's building products
manufacturing business has long been among the nation's leading
suppliers of building products to lumber and building materials
dealers and large do-it-yourself warehouse retailers. For more
information, visit www.GP.com.
Koch Industries, Inc., based in Wichita, Kan., (www.Kochind.com)
owns a diverse group of companies engaged in trading, operations
and investments worldwide, including a presence in 50 countries
in such core industries as trading, petroleum, chemicals, energy,
fibers, fertilizers, pulp and paper, ranching, securities and
finance.