IP, Union Camp Merger Completed

International Paper completed its merger with Union Camp Corp. Friday as a result of shareowners from both companies voting to approve the merger. Union Camp shareowners will receive 1.4852 International Paper common shares for each Union Camp share held. The total value of the merger is estimated to be US$7.9 billion, including assumption of debt.

With the completion of the merger, facilities currently operating under the Union Camp name will assume the International Paper name. The merger alone is expected to result in at least US$300 million in annual cost savings by the end of the year 2000 through a combination of reductions in overhead, process improvements, facility rationalization, purchasing and logistics savings. The company will hold capital expenditures to approximately US$1.2 billion this year, which is below the projected depreciation and amortization costs of US$1.5 billion, and will keep spending at that low level again next year.

Discretionary expenditures will be primarily for reducing costs, stabilizing processes and improving services, said John Dillon, chairman and CEO. "We will continue to keep production in line with customer needs. By managing our production system and costs, we have learned to meet customer orders without building inventories or adversely impacting our cost structure," Dillon said.