DAYTON, Ohio, and APPLETON, Wis., Oct. 1 - The Mead Corporation and Fox River Paper Company announced today that Fox River Paper will acquire the Gilbert Paper Company business and selected assets from Mead. With this acquisition, Fox River Paper Company will produce and sell all of the Gilbert Paper Company products as part of a separate branding strategy. As a result of this sale, Mead will have a 20 percent interest in the combined company. The acquisition is expected to be completed by Nov. 30, 2001. With this combination, Fox River Paper Company will becomethe leading supplier of premium text, cover and writing papers to the U.S. marketplace.
"This is an acquisition that makes sense for Fox River Paper,'' said Robert C. Buchanan, the company's chairman. "Gilbert Paper's geographic location, the skills of its employees, its existing customer base and its reputation in the marketplace all make it an ideal purchase for Fox River Paper Company.''
Fox River officials said they will market the Gilbert brand separate from the Fox River brand. Fox River and Gilbert paper products are sold through paper merchants and directly to converters. Gilbert's sales, marketing and customer service functions will continue to operate under the Gilbert Paper name.
"We do not want to lose any of the excellent brand equity Gilbert Paper Company has developed over the years by trying to merge Gilbert's grades into Fox River's current lineup,'' said Daniel D. King, president and chief operating officer of Fox River Paper Company. "We will go to market with two separate and proven brand strategies supported by Fox River's existing manufacturing facilities in Appleton, Wisconsin; Housatonic, Massachusetts; Urbana, Ohio; and Ripon, California.''
Approximately 100 current Gilbert Paper Company employees will join Fox River Paper. Some of these jobs will be in the Greenville converting center, while others, including sales, customer service and marketing, will be based in Appleton. Fox River officials said it is likely that there will be job reductions related to the integration of Fox River's and Gilbert's converting operations. Final plans on how to integrate the two operations are still being developed. Gilbert's paper mill, located in Menasha, will be shutdown by Mead at the time the acquisition is completed.
"Combining the two companies will create a more productive manufacturing and distribution system, with the potential for more volume,'' said Jerry Tatar, Mead chairman, president and chief executive officer. "We believe this transaction will enable both the Fox River and Gilbert Paper brands to maintain their individual strengths and prominence in the premium papers segment.''
"We're confident Fox River Paper Company will continue to emerge as the national leader in premium text, cover and writing papers, and the addition of the Gilbert Paper Company line further improves and broadens our reach into these markets,'' said King.
The sale and related mill closure will result in Mead taking a pretax charge of approximately $24 million at the time the transaction is completed. Mead expects the sale to have a positive effect on earnings after allowing for the impact of the charge.
Fox River Paper Company is a wholly-owned subsidiary of Fox Valley Corporation of Appleton, Wis., a privately-held company. Fox River Paper is one of the nation's leading manufacturers and suppliers of uncoated premium communication and specialty papers for printing, writing and art applications. Fox River manufactures its mix of paper products at four modern facilities in the Midwest and the East and West Coasts. For additional information about Fox River Paper Company visit the company's Web site at www.foxriverpaper.com .
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