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Exhibit 99.1
Release No. C-1595
Plum Creek Timber Company to Merge with
Georgia-Pacific Corporation's The Timber Company
Plum Creek Will be Preeminent Pure Timber Company, Owning and Managing Over 7.9
Million Acres of Geographically Diverse Timberlands
SEATTLE AND, ATLANTA - July 18, 2000 -- Plum Creek Timber Company (NYSE: PCL)
and Georgia-Pacific Corporation (NYSE: GP) today announced they have signed a
definitive agreement to merge Plum Creek Timber Company and The Timber Company
(NYSE: TGP), a separate operating group of Georgia-Pacific Corporation, creating
the world's preeminent pure timber company. Following completion of the
transaction, Plum Creek will become the second largest private timberland owner
in the United States, with over 7.9 million acres in 19 states. Plum Creek will
remain headquartered in Seattle.
"With this strategic acquisition, Plum Creek will generate greater value by
combining the resource and land management expertise of both entities with a
larger base of highly productive and more geographically diverse timberlands,"
said Rick R. Holley, Plum Creek's President and CEO. "We are excited because
this transaction not only meets our strict financial and operating criteria, it
adds significantly to the underlying value of our business. Specifically, we
expect it to be accretive immediately to cash flow and earnings, and it will
enhance our operating flexibility."
Under the agreement, The Timber Company shareholders will receive 1.37 shares of
Plum Creek Timber Company stock (currently paying an annual dividend of $2.28
per share) for each share of The Timber Company stock. Based on Plum Creek's
closing stock price of $27.375 on July 17, 2000, the overall transaction is
valued at approximately $4.0 billion, including $1.0 billion of The Timber
Company debt. The transaction is anticipated to be tax-free to holders of both
The Timber Company and Plum Creek common stock.
A. D. "Pete" Correll, Chairman and CEO of Georgia-Pacific Corporation, said The
Timber Company transaction presents a major departure from the traditional
ownership and operating philosophies of integrated forest products
manufacturers. "Since the separation of our timber business as an operating
group in 1997, we have proven the merits of independently operating timber
assets and demonstrated that manufacturers don't have to own timberlands to be
competitive. We can efficiently procure wood and fiber for our manufacturing
base independently, on the open market, from which more than 80 percent of our
raw material needs are already supplied. This transaction will enable us to
advance Georgia-Pacific's strategy toward the value-added segments of the
industry supply chain."
"We are acquiring some of the most productive timber assets in the United
States," noted Holley. "Together, we will have the scale, structure and combined
management capabilities to optimize the potential of these assets, while
maintaining an industry leading commitment to environmental stewardship." Plum
Creek and The Timber Company are recognized for their innovative approach to
environmental stewardship and the combined timberlands will be managed under the
guidelines of Plum Creek's Environmental Principles. The new lands will also be
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included in Plum Creek's ongoing independent third party audit program under the
Sustainable Forestry Initiative (SFI).
Plum Creek will assume a 10-year wood supply agreement between Georgia-Pacific
and The Timber Company, ensuring continued access to fiber for Georgia-Pacific's
manufacturing facilities and providing Plum Creek with a stable, long-term
customer for The Timber Company's southeastern timberlands.
Up to three new members will be added to the Plum Creek Board of Directors
including two to be agreed upon by Plum Creek and Georgia-Pacific. Mr. Holley
will remain President and CEO, and Donald L. Glass, currently President and
Chief Executive Officer of The Timber Company, will become Chief Operating
Officer and a member of the Board of Directors of the combined company. Plum
Creek intends to retain substantially all of The Timber Company's employees as
well as its Atlanta office.
The transaction is subject to approval by the shareholders of Plum Creek and The
Timber Company, and receipt of a ruling from the Internal Revenue Service that
the transaction is tax-free to Georgia-Pacific and Plum Creek, and to the
shareholders of The Timber Company. The transaction is also subject to receipt
of applicable governmental approvals and the satisfaction of customary closing
conditions. Closing is expected by the end of the first quarter of 2001.
Plum Creek Timber Company (NYSE: PCL), a public traded Real Estate Investment
Trust (REIT), is one of the largest timber companies in the nation, with
ownership and manufacturing facilities in the Northwest, Southern, and Northeast
United States.
Headquartered in Atlanta, The Timber Company is a separate operating group of
Georgia-Pacific Corporation and its performance is reflected in one of the
corporation's two common stocks. The Timber Company manages 4.7 million acres of
timberland in the United States and sells timber and wood fiber to industrial
wood users, with approximately 60 percent of its annual harvest sold to
Georgia-Pacific Corporation (NYSE: GP).
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS TO BE FILED BY PLUM CREEK AND
GEORGIA-PACIFIC WITH THE SEC REGARDING THE BUSINESS COMBINATION TRANSACTION
REFERENCED IN THE FOREGOING INFORMATION WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION. INVESTORS AND SECURITY HOLDERS MAY OBTAIN A
FREE COPY OF THE JOINT PROXY STATEMENT/PROSPECTUS (WHEN AVAILABLE) AND OTHER
DOCUMENTS FILED BY PLUM CREEK AND GEORGIA-PACIFIC AT THE SEC'S WEB SITE AT
WWW.SEC.GOV. THE JOINT PROXY STATEMENT/PROSPECTUS AND SUCH OTHER DOCUMENTS MAY
ALSO BE OBTAINED FROM PLUM CREEK BY DIRECTING SUCH REQUEST TO PLUM CREEK TIMBER
COMPANY, INC., ATTN: EMILIO RUOCCO, 999 THIRD AVENUE, SUITE 2300, SEATTLE, WA,
98104-4096 OR FROM THE TIMBER COMPANY BY DIRECTING SUCH REQUEST TO
GEORGIA-PACIFIC CORPORATION--THE TIMBER COMPANY, ATTN: RICH GOOD, 133 PEACHTREE
STREET, N.E., ATLANTA, GA, 30303.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of the
Private Litigation Reform Act of 1995. The accuracy of such statements is
subject to a number of risks, uncertainties and assumptions including, but not
limited to, the cyclical nature of the forest products industry, our ability to
harvest our timber, our ability to execute our acquisition strategy, and
regulatory constraints. These risks are detailed from time to time in our
filings with the Securities and Exchange
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Commission. Forward-looking statements speak only as of the date made, and
neither the Company nor its management undertakes any obligation to update or
revise any forward-looking statements. It is likely that if one or more of the
risks and uncertainties materializes, the current expectations of the Company
and its management will not be realized.
Investor Contacts:
Richard Good, Georgia-Pacific (404) 652-4720
Emilio Ruocco, Plum Creek (206) 467-3618, (800) 858-5347
Media Contacts: Robert J. Jirsa, Plum Creek (206) 467-3626
Media Contact:
Ken Haldin (404) 652-6098
