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Koch Industries to Acquire Georgia Pacific

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  • Koch Industries to Acquire Georgia Pacific

    I doubt if this affects their racing promotion, but since GP was discussed a few weeks ago, here it is:

    GEORGIA-PACIFIC CORP.

    Transmitted by CNW Group on : November 13, 2005 16:30
    Koch Industries to Acquire Georgia-Pacific for $48 Per Share In Cash


    Transaction, subject to completion, valued at $21 billion, including debt

    - 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 and WICHITA, Kan. Nov. 13 /CNW/ -- 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(R), Angel
    Soft(R), Brawny(R), Sparkle(R), Soft 'n Gentle(R), Mardi Gras(R), Vanity
    Fair(R) and Lotus(R), as well as the Dixie(R) 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., (http://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.

    NOTICE TO INVESTORS: This announcement is neither an offer to purchase nor
    a solicitation of an offer to sell securities. The tender offer for the
    outstanding shares of Georgia-Pacific common stock described in this press
    release has not commenced. At the time the offer is commenced an indirect,
    wholly owned subsidiary of Koch Industries will file a tender offer statement
    on Schedule TO with the Securities and Exchange Commission and Georgia-Pacific
    will file a solicitation/recommendation statement on Schedule 14D-9 with
    respect to the offer. The tender offer statement (including an offer to
    purchase, a related letter of transmittal and other offer documents) and the
    solicitation/recommendation statement will contain important information that
    should be read carefully before any decision is made with respect to the
    tender offer. Those materials will be made available to Georgia-Pacific
    security holders at no expense to them. In addition, all of those materials
    (and all other offer documents filed with the SEC) will be available at no
    charge on the SEC's Web site: www.sec.gov.

    FORWARD-LOOKING STATEMENTS: Any statements made regarding the proposed
    transaction between Koch Industries, Inc. and Georgia-Pacific Corporation, the
    expected timetable for completing the transaction, successful integration of
    the business, benefits of the transaction, earnings, the maintenance of
    Georgia-Pacific's headquarters in Atlanta and any other statements contained
    in this news release that are not purely historical fact are forward-looking
    statements, within the meaning of the Private Securities Litigation Reform Act
    of 1995, that are based on management's beliefs, certain assumptions and
    current expectations. These statements may be identified by their use of
    forward-looking terminology such as the words "expects," "projects,"
    "anticipates," "intends" and other similar words. Such forward-looking
    statements involve risks and uncertainties that could cause actual results to
    differ materially from those projected. These risks and uncertainties
    include, but are not limited to, general economic, business and market
    conditions and the satisfaction of the conditions to closing of the proposed
    transaction. For a more complete discussion of certain of the risks and
    uncertainties that could cause actual results to differ from those contained
    in the forward-looking statements, the discussion of risks and uncertainties
    in the Georgia-Pacific 2004 10-K and other SEC filings. The forward-looking
    statements contained in this news release are made as of the date hereof, and
    we do not undertake any obligation to update any forward-looking statements,
    whether as a result of future events, new information or otherwise.



    -30-

    /For further information: Sheila Weidman, +1-404-652-6322, Robin Keegan,
    +1-404-652-4713, both of Georgia-Pacific Corp.; or Mary Beth Jarvis,
    +1-316-828-3756, Koch Industries, Inc. /
    “Jealousy is the tribute mediocrity pays to genius.” -- Archbishop Fulton J. Sheen

  • #2
    In case y'all missed it, GP has announced as an Associate sponsor for Jeff Gordon (GP Logo on car, driver uniform and gloves). Word on the street it is $2M a year for 4 years. NOT TOO SHABBY

    Everybody at GP thought this was a better deal than the $10M a year Petty was asking them to go to for his car. Gordon gets something like 1800 times more TV interview time than Petty. GP reckons with the drivers suit placement alone they will get something like 4 hours of Logo exposure in 2006 in Race, Pre-Race and Network TV interview time.
    ...Always follow the money

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