Sale Sharpens Focus on Core Consumer Products Businesses and Reduces Cyclical
Exposure
DEERFIELD, Ill., Dec. 15 /PRNewswire/ -- Fort James Corporation (NYSE: FJ)
announced today that it has agreed to sell all of the shares of Fort James-
Marathon, Ltd. to a joint venture between Tembec Inc. and Kruger Inc., both of
Montreal, Canada, for Cdn $100 million. The transaction is expected to be
completed in the first quarter of 2000. Closing is subject to customary
conditions, including regulatory approvals.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990204/CGTH023 )
This agreement is another step forward in Fort James' plan to sharpen the
company's focus on its core consumer products business.
Marathon is a wholly-owned subsidiary of Fort James that owns and operates
a non-integrated northern bleached softwood kraft pulp mill in Marathon,
Ontario. Currently, approximately half of Marathon's 180,000 annual tonnes of
production is used by Fort James' tissue operations in Europe and the U.S.,
with the remaining production sold as market pulp. Approximately 300 people
are employed at the Marathon mill.
As a non-integrated pulp facility, the Marathon mill does not offer Fort
James a strategic benefit, and exposes the company to increased variability of
earnings. Following the divestiture of the Marathon mill, Fort James
estimates that its worldwide integration with kraft pulp will be reduced from
approximately 90% to 80%. In addition, all of the company's remaining
internal pulp operations are on-site integrated with the company's towel and
tissue manufacturing mills.
"While Marathon is an efficient mill producing high-quality pulp, it no
longer fits our consumer strategy," said Miles L. Marsh, Fort James' chairman
and chief executive officer. "We believe Marathon may realize greater value
with owners such as Tembec and Kruger."
The parties will enter into a three-year renewable pulp supply agreement,
largely to provide pulp to Fort James' non-integrated European tissue
operations.
Fort James is a leading international consumer products company, serving
consumers both at home and away-from-home with bathroom and facial tissue,
paper towels, napkins, and cups, plates, cutlery and food wrap products. The
company's popular brands include Quilted Northern, Soft 'N Gentle, Brawny,
Mardi Gras, So-Dri, Vanity Fair, and Dixie in North America and Lotus, Okay,
embo, Colhogar, Tenderly, Kittensoft and Delica in Europe. The company has
annual sales of $6.8 billion and more than 50 manufacturing facilities in the
USA, Canada and 10 countries around the world.
Copies of today's news release, along with additional information on Fort
James, is available, at no charge, by calling 888-526-3711. You may also
access the company's web site at Internet address http://www.fortjames.com.
SOURCE Fort James Corporation
 back to top
Related links:
http://www.fortjames.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/19990204/CGTH023
or PR Newswire Photo Desk, 888-776-6555 or 201-369-3467
CONTACT:
Financial, Celeste Gunter, 847-317-5355, or
Media, Mark Lindley, 847-317-5280, both of Fort James
|
