PAPER companies Mead, Westvaco to merge in $3 billion stock-swap to compete globally

Wednesday, August 29th 2001, 12:00 am
By: News On 6

STAMFORD, Conn. (AP) _ Mead Corp. and Westvaco Corp. are merging in a $3 billion deal designed to forge two midsize paper companies into a more formidable global competitor.

MeadWestvaco Corp. will have revenue of more than $8 billion in packaging, coated and specialty papers, consumer and office products and specialty chemicals, the companies said Wednesday.

Top executives expect the combined company to compete more effectively with global forest products industry heavyweights like Georgia-Pacific Corp. and International Paper Co.

``I think it is a good combination,'' Anna Torma, first vice president at Merrill Lynch, said. ``I do believe it could act as a catalyst for further consolidation in the industry.''

Mead spokesman Doug Draper said there will be some job cuts, but no decision has been made on how many.

MeadWestvaco will have more than 32,000 employees, with headquarters in Stamford, Conn., where Westvaco is based. The coated papers and consumer and office products business will be in Dayton, Ohio, where Mead is based.

Mead's chairman, president and chief executive, Jerome F. Tatar, will serve as chairman of the combined company; Westvaco's chairman and CEO John A. Luke Jr. will be CEO and president.

The companies expect to cut costs and boost revenues by more than $325 million a year.

Under the deal, Mead shareholders will own 50.2 percent of the new company and will receive one share in MeadWestvaco for each Mead share, plus $1.20 per share when the deal is completed. Westvaco shareholders will own 49.8 percent of the new company and will receive 0.97 share for each share held.

The deal has been approved by the boards of both companies and is subject to shareholder and regulatory approval. The companies hope to complete it by the end of the year.