GEORGIA-PACIFIC TO SPLIT INTO TWO COMPANIES

Consumer Products and Packaging to Stand Alone

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CINCINNATI (AdAge.com) -- Georgia-Pacific Corp. today confirmed published reports that it plans to split into two parts, including a yet-to-be-named $12 billion consumer products and packaging business and a $13 billion building products and distribution business.

The new consumer products and packaging company, to be spun off through an initial public offering, will be headed by current Georgia-Pacific Chairman-CEO A.D. "Pete" Correll. That company will include a $7 billion global consumer tissue-towel and disposable tableware business, led by the Quilted Northern, Brawny and Dixie brands.

Omnicom Group's DDB Worldwide, New York, handles bath tissue brands and Dixie, while Publicis Groupe's Fallon Worldwide, New York, handles paper towels and corporate branding.

The remaining Georgia-Pacific business will be run by Lee Thomas, who will serve as president-CEO.

News of the deal, in which current Georgia-Pacific bondholders will be permitted to exhange bonds for those of the new consumer products and packaging company, prompted Moody's Investor Services to downgrade Georgia-Pacific's debt to junk status. The deal hinges on Georgia-Pacific's ability to secure the necessary debt and equity financing.

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