Georgia-Pacific LLC, the tissue- maker owned by Koch Industries Inc., said it agreed to buy a unit of International Paper Co. (IP:US) for $750 million to gain 16 U.S. factories that make construction materials.
The purchase of the Temple-Inland Building Products unit includes facilities that make gypsum, lumber, fiberboard and particle board, Atlanta-based Georgia-Pacific said today in a statement. The transaction should close in the first quarter, pending regulatory approvals, it said.
International Paper, which acquired Temple-Inland Inc. in February for $4.3 billion, is selling the building-products unit because it isn’t “core” to its strategy, Chairman and Chief Executive Officer John Faraci said in a separate statement. Georgia-Pacific said the building-products assets are located near large and growing regions.
“This will allow us to expand our geographic footprint and enhance our service to new and existing customers,” Georgia- Pacific CEO Jim Hannan said in his company’s statement.
International Paper, based in Memphis, Tennessee, said proceeds will be used to pay down debt. The company, the world’s largest pulp and paper producer, sold three U.S. containerboard mills in July to fulfill a Department of Justice settlement related to the Temple-Inland purchase.
International Paper rose 1.1 percent to $37.79 as of 10:47 a.m. in New York. The shares (IP:US) have gained 28 percent this year.
Koch Industries, based in Wichita, Kansas, has owned Georgia-Pacific since 2005.
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