Seventy-five years after Owen Cheatham founded Georgia-Pacific Corp. in Augusta, the company's board of directors returned and announced the birth of a new, $12 billion corporation.
At its annual shareholders meeting Tuesday, the board voted unanimously to split Georgia-Pacific into two separate, publicly traded companies.
The company's consumer products and packaging businesses will branch off; the building products manufacturing and distribution business will continue as Georgia-Pacific Corp.
"We have two strong but distinct businesses with different financial and operating characteristics," Chairman and CEO Pete Correll told shareholders. "This will unlock the true value we believe exists in this company."
The initial public offering of the new company is expected by the third quarter. Full separation is expected to be completed in the first half of 2003.
The board has been moving in this direction since 1999, Mr. Correll said, citing last year's merger with Plum Creek Timber Co. and the splitting off of its timberlands, the acquisition of Fort James Corp. in 2000 and the sale of the company's white paper assets to Domatar Inc. in 2001.
The new consumer products and packaging company will consist of Georgia-Pacific's $7 billion consumer products business, $2.5 billion packaging business and $2.3 billion pulp and paper businesses. Combined operating profits of these businesses were about $1.2 billion in 2001.
The new company's name and board of directors were not announced.
"The management team and every worker is ready to face the challenges ahead with the same enthusiasm that started in a small Augusta business 75 years ago," Mr. Correll said.
With more than 600 locations and 75,000 employees in North America and Europe, Georgia-Pacific is one of the world's leading manufacturers and distributors of tissue, pulp, paper, packaging, building products and related chemicals.
Reach John Bankston at (706) 823-3352 or firstname.lastname@example.org.