The US paper and pulp producer Georgia-Pacific LLC has agreed to purchase Buckeye Technologies for the price of US$1.45 billion. The move is designed to have the Koch brothers enterprise expand its cellulose based products output.
Georgia-Pacific would be paying US$37.50 per share, according to both Georgia-Pacific and Buckeye Technologies. This adds on a 25% premium on the closing share price of the Memphis, TN based yesterday. In New York, the share price of Buckeye increased by 25% upon knowledge of the pending transaction, peaking at US$37.50 in opening day trading.
Buckeye is in the business of providing specialty fibers and other non-woven materials from cotton and wood sources from Florida, Germany, North Carolina and Tennessee. This is the largest deal for Georgia-Pacific after its acquisition by Koch Industries back in 2005, according to Bloomberg data.
The financial advisor for Buckeye is Barclays Plc and Dechert LLP as its legal advisor. For Georgia-Pacific's part, UBS AG and Blackstone LP are the financial advisors.
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