SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: May 4, 1997
JAMES RIVER CORPORATION OF VIRGINIA
(Exact name of Registrant as Specified in its Charter)
Virginia 1-7911 54-0848173
(State or Other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
Incorporation)
120 Tredegar Street, Richmond, Virginia 23219
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (804) 644-5411
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)<PAGE>
Item 5. Other Events.
On May 5, 1997, James River Corporation of Virginia, a
Virginia corporation (the "Company"), and Fort Howard
Corporation, a Delaware corporation ("Fort Howard"), issued a
joint press release announcing that they had entered into an
Agreement and Plan of Merger, dated as of May 4, 1997, among
the Company, James River Delaware, Inc., a Delaware corporation
and a wholly owned subsidiary of the Company ("Merger Sub"),
and Fort Howard, pursuant to which (i) Merger Sub will be
merged with and into Fort Howard, with Fort Howard the
surviving corporation in the merger as a wholly owned
subsidiary of the Company (the "Merger") and (ii) each share of
Common Stock, par value $.01 per share, of Fort Howard issued
and outstanding immediately prior to the effective time of the
Merger (other than certain shares which will be cancelled) will
be converted into 1.375 shares of Common Stock, par value $.10
per share, of the Company, including the corresponding
percentage of a preferred share purchase right issued pursuant
to the Company's Rights Agreement. Consummation of the Merger
is conditioned upon, among other things, the requisite approval
of the shareholders of each of the Company and Fort Howard and
customary regulatory approvals. Such press release is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits.
99.1 Press release, dated May 5, 1997, issued by the
Company and Fort Howard.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly autho-
rized.
JAMES RIVER CORPORATION OF VIRGINIA
By: /s/ Clifford A. Cutchins
Clifford A. Cutchins, IV
Senior Vice President and
General Counsel
Date: May 5, 1997<PAGE>
Index to Exhibits
Exhibit Description
99.1 Press release, dated May 5, 1997, issued by James
River Corporation of Virginia and Fort Howard
Corporation.
[Logo of James River Corporation [Logo of Fort Howard
of Virginia] Corporation]
Contacts:
JAMES RIVER: FORT HOWARD:
On May 5: Media -- Dick Elder Media -- Clifford A. Bowers
(212) 403-1901 (414) 435-8821
Financial -- Celeste Gunter Financial -- J. Michael Lempke
(212) 403-1901 (414) 435-8821
Subsequent: Media -- Dick Elder
(804) 343-4785
Financial -- Celeste Gunter
(804) 649-4307
JAMES RIVER, FORT HOWARD AGREE TO MERGE
CREATING A PREEMINENT CONSUMER PRODUCTS COMPANY
NEW YORK, NY -- May 5, 1997 -- James River Corpora-
tion (NYSE:JR) and Fort Howard Corporation (NASDAQ:FORT) an-
nounced today that they have signed a definitive merger agree-
ment creating a preeminent worldwide consumer products company
with a strong competitive position and outstanding prospects
for growth. The new company, which will be named Fort James
Corporation, will have annual sales in excess of $7 billion.
Under the agreement, shareholders of Fort Howard will
receive 1.375 shares of Fort James common stock for each share
of Fort Howard common stock. This represents a per share value
of $42.45 and a total value of $5.8 billion to Fort Howard
shareholders, including the assumed Fort Howard debt, based on
the James River closing stock price of $30.875 on May 2.
Shareholders of James River will retain their current number of
shares. Excluding non-recurring items and an anticipated reor-
ganization charge, the merger is expected to be accretive to
pro forma 1997 earnings, without anticipated synergies, and
accretive to 1998 earnings by approximately 10 percent, includ-
ing synergies.
The transaction is structured to qualify as a tax-
free reorganization and will be accounted for as a pooling of
interests. The merger, which is expected to be completed at
the end of the summer, is conditioned on receiving regulatory
clearances in the United States and Europe and requires the
approval of the shareholders of both companies. Morgan Stanley
and certain other shareholders, representing approximately 20
percent of Fort Howard's fully diluted shares, have agreed to
vote in favor of the merger.
"This merger opens the way for two strong companies
to emerge as a powerful single force in the consumer goods in-
dustry," said Miles L. Marsh, James River's chairman and chief
executive officer. "Because Fort James will be able to compete
more effectively as a combined company than we could have indi-
vidually, this merger will be attractive to shareholders, cus-
tomers and employees."
Marsh added, "Fort James will benefit from the com-
plementary strengths of James River's strong brands and market-
ing skills and Fort Howard's exceptional, low-cost manufactur-
ing base and leadership in commercial products.
- M O R E -<PAGE>
Page 2 -- James River, May 5, 1997
Fort Howard Agree to Merge
The broad North American focus of both companies, as well as
their strong pan-European presence, represents a gateway to
tremendous global opportunities."
Michael T. Riordan, Fort Howard's chairman and chief
executive officer, noted "Our combined product lines, supported
by strategically located assets and world-class manufacturing
capabilities, create a strong competitive position that will
fuel long-term growth. In addition, the significant operating
cash flow of the combined company, which totaled more than $1
billion on a pro forma basis in 1996, will allow for an aggres-
sive pace of debt reduction, while at the same time support
strong business growth. Both James River and Fort Howard have
made significant recent progress in reducing debt, and Fort
James remains committed to this important objective."
Fort James will be able to offer a broad range of
tissue and tabletop products. Its retail products, to be dis-
tributed in grocery and drug stores, mass merchandisers, and
warehouse clubs, include such well-known North American brands
as Quilted Northern, Soft 'n Gentle, Brawny, Mardi Gras, Vanity
Fair, Green Forest and Dixie. In addition, Fort James will
have a strong presence in the European market with brands such
as Lotus, Nouvelle, Colhogar and Tenderly. The company will
also be a leading supplier of store brands. Away-from-home
products will be sold primarily through paper, foodservice and
janitorial distributors to serve the lodging, industrial,
health care, restaurant, foodservice, leisure, transportation
and office building sectors, as well as schools, governments
and retail establishments.
The merger is expected to generate cost savings esti-
mated to total at least $150 million in 1998, increasing to
more than $200 million per year over time. Fort James intends
to reduce expenses and increase efficiency by combining comple-
mentary technologies, optimizing product manufacturing and lo-
gistics across the combined systems, increasing purchasing ef-
ficiencies, eliminating redundant overhead costs, consolidating
work forces where duplication exists and increasing product
quality and productivity. To cover the cost of implementing
these plans, Fort James expects to take a reorganization charge
in the quarter in which the merger is completed. The amount of
the charge has not been determined.
At the same time, Fort James will continue the cost
reduction program begun by James River in 1995, which is ex-
pected to deliver enhanced savings as this program matures. A
portion of the expected incremental savings will be reinvested
in Fort James' brands in order to grow market share and accel-
erate top-line growth.
Under the terms of the merger agreement, which has
been unanimously approved by the boards of directors of both
companies, Marsh will serve as chairman and chief executive
officer of Fort James and Riordan will be president and chief
operating officer. The board of directors of Fort James will
be comprised of 15 directors, 11 from James River and four
from Fort Howard. Fort James' senior management team will also
include key James River and Fort Howard executives. A new ex-
ecutive headquarters for Fort James' senior management will be
established in the Chicago area.
- M O R E -<PAGE>
Page 3 -- James River, May 5, 1997
Fort Howard Agree to Merge
"From the beginning, we have looked at this as a
merger of equals," said Marsh, "with both companies
contributing important product strengths, strategic assets and
management talent."
"There has been a very high level of mutual respect
in all of our discussions," added Riordan, "and I believe we
will be able to move very quickly to capitalize on synergies
and aggressively pursue growth opportunities."
As a result of the merger, Fort James will have a
total market capitalization of $11 billion, including debt of
$4.4 billion. Fort James will have approximately 218 million
outstanding fully diluted common shares.
Fort Howard currently pays no dividend. James River
pays a current quarterly cash dividend of $.15 per share, which
will be the initial dividend rate of Fort James.
James River Corporation, with 1996 consolidated sales
of $5.7 billion, is a leading marketer and manufacturer of
paper-based consumer products, packaging, and business, print-
ing and converting papers. The company has a total of approx-
imately 60 manufacturing facilities located in the United
States, Canada and ten European countries. The second largest
worldwide producer of tissue products, James River markets such
widely recognized brands as Quilted Northern bathroom tissue,
Brawny paper towels, Vanity Fair napkins, and Dixie cups and
plates in North America, and Lotus bathroom tissue, towels, and
facial tissue in Europe.
Fort Howard, with 1996 consolidated sales of $1.6
billion, is a leading producer of tissue products for away-
from-home customers in the United States, and a leading sup-
plier of value brands and private label products for retail
tissue customers. With three manufacturing facilities in the
United States, one operation in the United Kingdom and a joint
venture in China, Fort Howard's products include bath and fa-
cial tissue, towels, napkins, wipers and specialty nonwoven
products. Familiar brand names include Mardi Gras, Soft 'n
Gentle, and Green Forest.
Forward-looking statements in this release are made
pursuant to the safe harbor provisions of the Private Securi-
ties Litigation Reform Act of 1995. Such forward-looking
statements are not guarantees of future performance and are
subject to risks and uncertainties regarding this transaction.
Such risks and uncertainties include, but are not limited to,
the satisfaction of the conditions to close the transaction;
determinations by regulatory and governmental authorities; the
ability to successfully integrate the James River and Fort
Howard businesses; the ability to achieve synergistic and other
cost reductions and efficiencies; general business and economic
conditions; competitive pricing pressures for the company's
products; changes in raw material, energy and other costs; and
opportunities that may be presented to and pursued by the com-
pany. Any of these risks or uncertainties may cause actual
results or future circumstances to differ materially from the
forward-looking statements contained in this news release.
# # #
Today's news release, along with past releases from
James River, is available by fax, at no charge, by calling
(800) 758-5804, ext. 457350. You may access James River's
corporate-wide site at Internet address http://
www.jamesrivercorp.com, and Fort Howard's corporate-wide site
at Internet address http:// www.forthoward.com.
- M O R E -
