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International Business, 8th Edition by Michael H. Moffett, Iikka A. Ronkainen, Michael Czinkota

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PART 4 CASE 3

KOCH INDUSTRIES ACQUIRES GEORGIA-PACIFIC

The forest products industry, an umbrella for a broadly diverse output ranging from paper and packaging to building and other wood products, is rapidly becoming a strategic misnomer. That is a key reason why the industry has been executing a marathon restructuring, that most recently included the $21 billion acquisition of Georgia-Pacific by privately owned industrial titan Koch Industries, Inc. Although few private companies have the clout of a Koch to engineer comparable megadeals, the acquisition could serve as a model for private equity firms to buy forest products and other diverse raw material companies and over haul them without investors looking on.

“Georgia-Pacific Buys Spurs Paper Shake-Out,” Mergers and Acquisitions, January 2006, p. 32

We rate the shares of Georgia-Pacific Corporation BUY/HIGH RISK (1H). Georgia-Pacific is one of the most profitable companies in the U.S. paper and forest industry, and it remains one of our preferred stocks. The company has heavy exposure to our favorite commodity businesses, wood products and containerboard. We have believed the stock's valuation is clearly out of step with the fundamental forces affecting the company.

Georgia-Pacific Group, Citigroup, November 15, 2005, p. 3

It was January 2006, and A. D. “Pete” Correll, CEO of Georgia-Pacific, had finally reached an agreement which would take his industry leading U.S.-based forest products conglomerate private. In a deal totaling ...

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