Domtar to Acquire Portions of Georgia-Pacific Paper Business in Arkansas, Maine & Wisconsin
Press release from the issuing company
ATLANTA and MONTREAL April 30, 2001 - Georgia-Pacific Corp. (NYSE: GP) and Domtar Inc. (TSE and NYSE: DTC) today announced that the companies have signed a letter of intent for Domtar to acquire a portion of Georgia-Pacific's pulp and paper business. The proposed purchase price and other terms were not disclosed pending final agreement between the parties.
The assets involved are Georgia-Pacific's stand-alone uncoated fine paper mills at Ashdown, Ark.; Nekoosa and Port Edwards, Wis.; and Woodland, Maine as well as the associated pulp facilities.
The sale, which is contingent on the completion of due diligence, execution of a definitive agreement and customary approvals, is expected to be completed in the second quarter 2001. Georgia-Pacific will use proceeds from the sale to repay debt.
"The transaction will represent another leap forward in Georgia-Pacific's ongoing transformation," said A.D. "Pete" Correll, chairman and chief executive officer of Georgia-Pacific. "This major divestiture will serve the dual purpose of generating significant cash toward debt reduction while further refining our company's portfolio of assets.
"I am optimistic that we will be able to reach a final agreement with Georgia-Pacific that makes sense for both of us," said Raymond Royer, president and chief executive officer of Domtar. "This acquisition is consistent with our stated strategy of growing our North American fine paper presence, and I believe it will translate into substantial value creation for Domtar shareholders while allowing us to maintain strength in our balance sheet."
Annual paper capacity at the Ashdown mill is 825,000 tons, which is predominantly copier paper and includes other specialty and offset printing papers; the facility's market pulp capacity is 175,000 tons annually. The Port Edward and Nekoosa mills have annual paper capacity of 185,000 and 218,000 tons, respectively. The two mills produce various premium, specialty and copier grade papers. The Woodland mill's annual paper capacity is 130,000 tons and its market pulp capacity totals 380,000 tons. Combined, the facilities being sold employ approximately 3,200 people.
Georgia-Pacific will continue to own and operate white paper mills at Camas, Wash., Crossett, Ark., Port Hudson, La., and Wauna, Ore. In addition, Georgia-Pacific's Unisource subsidiary will remain the sole national distributor of Xerox branded papers and supplies, and one of North America's largest distributors of printing and office paper.
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