Georgia-Pacific Converting Buckeye Deal to Merger


ATLANTA (AP) – Georgia-Pacific is converting its acquisition of Buckeye Technologies Inc. to a merger that requires a shareholder vote because of regulatory inquiries.

Georgia-Pacific LLC, a privately held paper, packaging and building products company, said Wednesday that it was converting to a "long form" merger from a pending acquisition because of a second request from the Justice Department for details about Buckeye's nonwovens business. The Atlanta company also said that it was ending the tender offer related to the transaction.

Georgia-Pacific announced in April that hit had reached a deal to buy Buckeye for about $1.46 billion.

Buckeye, which is based in Memphis, Tenn., runs manufacturing plants in the U.S. and Germany. It makes and markets specialty fibers and nonwoven materials made from wood and cotton. Those products are used in personal hygiene products, disposable diapers, engine air and oil filters, napkins, cleaning supplies, baby wipes and a series of other goods.

Earlier this month Georgia-Pacific said that it received another request from the Federal Trade Commission and the antitrust division of the Justice Department for more information and documents related to the Buckeye acquisition. The FTC and antitrust unit had asked for more information and documentation on Buckeye's nonwovens business, with the companies saying that they would continue to work with both parties.

A long form merger is when more than the minimum number of shares – but less than 90 percent – are tendered in an offer. In such an instance, shareholders must vote in favor of the deal for it to close. In a short form merger, 90 percent or more of the shares are tendered and no shareholder vote is needed.

The companies said that Buckeye will hold a special shareholders meeting promptly to vote on the merger agreement. At least 75 percent of Buckeye's outstanding stock must be voted in favor of the deal.

If the transaction is approved, Buckeye shareholders will receive $37.50 per share in cash. This is the same amount they would've received in the tender offer.

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