Koch Industries Inc. has agreed to buy paper products and chemicals supplier Georgia-Pacific Corp. for $21 billion, the companies announced last week. Georgia-Pacific, which markets metalworking fluid additives, among other products, will retain its identify as a wholly owned subsidiary of Wichita, Kansas-based Koch.
The agreement, announced Nov. 13, calls for Koch to buy all of Georgia-Pacifics stock for $13.2 billion, or $48 per share. In addition, Koch will assume upwards of $8 billion in Georgia-Pacific debt.
Headquartered in Atlanta, Georgia-Pacific is one of the worlds largest manufacturers of tissue, packaging, paper, building products and related chemicals, with sales revenue of $20 billion in 2004. Georgia-Pacific Resins Inc. uses chemicals from pine trees to make, among other products, emulsifier bases, lubricity additives and corrosion inhibitors that are sold mostly into metalworking fluids. Based in Chicago, the resins business, formerly operated as Actrachem, was acquired by Georgia-Pacific in 1999.
Koch said it will provide investment to help Georgia-Pacific grow, but the company will operate independently.
Koch is a privately owned diversified company with subsidiaries engaged in petroleum, chemicals, fibers, ranching and finance. Kochs Flint Hills Resources Inc. owns 50 percent of the Excel Paralubes base oil refinery in Westlake, La.
The Georgia-Pacific deal is subject to a number of conditions, including regulatory approvals.