G-P set for spin-off, L-P ready for sell-off

Louisiana-Pacific Corp. was born in 1972 when the federal trade commission ordered Georgia-Pacific Corp. to spin off 207o of its company into a new, separate entity.

Now 30 years later, both companies have announced they are spinning off large parts of their operations.

Louisiana-Pacific plans to sell many of its businesses in an attempt to reduce debt-while repositioning OSB as its core business.

As part of the divesture, the Portland, Or.-based company plans to sell 935,000 acres of timberlands in Texas, Louisiana and Idaho. It also plans to divest its lumber business, which annually produces 1.4 billion bd. ft. of timber.

The divesture will also include LP's plywood, industrial panels, wholesale and distribution businesses. The reductions are expected to call for the closure and/or sale of approximately 30 North American mills-mostly located in the Southeast U.S.

Nearly 4,400 jobs are expected to be eliminated as part of the reduction plan.

The company has already permanently closed its Olathe, Co., OSB mill and announced plans to sell its Tacoma. Wa.. stud mill.

In addition to OSB, L-P's new core businesses will be composite wood products, engineered wood products and plastic building materials. In 2001, these businesses had revenues totalling $ 1.4 billion.

The divesture plan is expected to net the company $600 to $700 million and will be implemented over the next 12 to 18 months.

Georgia-Pacific Corp., Atlanta, Ga., as expected, decided May 7 to go ahead with the proposal to split off its building products and distribution company from the consumer paper division.

"We are aligning our businesses into two new companies, each of which will have a distinct strategic focus and competitive strength," said c.e.o. A.D. "Pete" Correll.

Lee M. Thomas has been chosen to run the new building products company.

The split will not be completed until the first half of next year, although an initial public offering for the $ l2 billion consumer products and packaging business in expected in third quarter 2002, according to officials involved in the negotiations.

The building products company has an estimated value of $ l3 billion.