>From The Oregonian, May 8, 2002, p E1 (Business)
G-P plans to spin off unit, sell public shares
Georgia-Pacific will separate its consumer-products business and hold
a $1.6 billion initial public offering during the third quarter
By JUSTIN BACHMAN, Associated Press
ATLANTA - The board of Georgia-Pacific voted Tuesday to separate the
company's lucrative consumer products business into a new company and
sell some of its shares to the public.
Georgia-Pacific will continue as a building products and distribution
firm, with annual sales of about $13 billion. G-P has about 3,050
employees in Oregon and about 1,400 in Camas, Wash., which is in Clark
County. About 80 percent of the regional employment will be part of
the new company.
"In deciding to separate, we are recognizing that we have two
distinct businesses with different financial and operating
characteristics, capital needs, cyclicality, growth potential and
investment attributes," said A.D. "Pete" Correll, who will be chairman
and chief executive of the new, Atlanta-based company, which has not
The IPO, expected to raise as much as $1.6 billion, is scheduled for
the third quarter.
The stock issue will involve 15 percent to 20 percent of the new
company, which has yearly sales of more than $12 billion from brands
such as Angel Soft and Quilted Northern bathroom tissue, Dixie cups
and Brawny paper towels.
Atlanta-based Georgia-Pacific will use the funds from the sale to pay
off debt and distribute the remaining shares to its shareholders next
In an earlier attempt to pay down debt and distance itself from
asbestos liability associated with G-P's building products division,
the company late last year attempted to sell the division to
Portland-based Willamette Industries, which Weyerhaeuser was trying to
In January, Willamette cut off talks with G-P and agreed to the
Lee M. Thomas, most recently Georgia-Pacific's building products
president, will become Georgia-Pacific president and chief executive.
Thomas, 57, was credited with integrating Fort James, which
Georgia-Pacific bought for $11 billion in 2000.
Correll acknowledged the new company he leads will face initial
difficulties as it peddles tissues and paper towels under a new
moniker. But the new company name - to be announced this summer - will
be "an exciting name that energizes our customers and energizes our
employees," he said.
Also Tuesday, shareholders met in Augusta, where the company was
established 75 years ago as a lumberyard.
Georgia-Pacific shares rose 5 cents to close at $29.85 Tuesday on the
New York Stock Exchange. G-P shares fell 10 cents in after-hours
Posted as a courtesy by
Daniel B. Wheeler