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Georgia-Pacific Considers Splitting Consumer, Lumber Businesses

Press release from the issuing company

March 26, 2002 -- (WhatTheyThink.com) -- Georgia-Pacific (GP) may separate its lumber and consumer-products business units to unlock value in the company. Officials say it is not an attempt to avoid the ongoing asbestos liability. The Associated Press said Georgia-Pacific officials refused to comment on the asbestos aspect or motive in the decision. But the company has said it is weighing a restructuring that would allow it to focus on its core tissue, box and lumber businesses. Greg Guest, spokesman for GP said it would be incorrect to consider this reactionary and that the possible split is very much along the strategy of unlocking value in unconventional ways. GP faces more than 60,000 asbestos claims connected with its use of the material in wallboard. It discontinued usage in the 1970s and has relied mostly on insurance to cover its liability. That changed in January when GP took a $221 million charge against earnings to cover estimated liabilities beyond its insurance coverage. Selling or spinning off its building products would not end that liability. Guest said GP has been dealing with asbestos litigation for many years and “it continues to be manageable."