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Great Northern Nekoosa Corporation - Lehman Brothers Collection

Great Northern Nekoosa Corporation

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Great Northern Nekoosa Corporation (GNN) was a paper manufacturing company made up of several companies that merged and were acquired over the twentieth century. GNN itself was acquired by Georgia-Pacific in a hostile takeover in 1990.

Great Northern Nekoosa began as the Great Northern Paper Company, which was incorporated in 1898 in Maine. Its first mill was built in 1900 to manufacture newsprint. Great Northern became one of the largest American suppliers of newsprint, mainly on the East Coast. The company began diversifying its business and expanding into the production of specialty papers in the 1950s. In 1964 Great Northern produced 16.4 percent of newsprint made in the United States and 4.6 percent of newsprint used there. It also made specialty papers for magazines, newspaper supplements, paperback books, and catalogs. To run its paper-processing mills, Great Northern owned six hydro-power stations and dams on Maine's Penobscot River; these stations produced 66 percent of the Maine factories' power in 1964. It also owned extensive Maine timberlands and had its own Engineering and Research Department. In 1965 a staff of 3,300 office, mill, and woodland employees worked for Great Northern. That year, Great Northern earned 38 percent of its sales from newsprint, 35 percent from coated and groundwood specialty papers, and 27 percent from kraft linerboard.

In 1962 Great Northern helped to organize another company, Great Southern Land and Paper Company, to produce kraft linerboard near Cedar Springs, Georgia, on the Chattahoochee River. Kraft linerboard is a heavy paper used in the production of corrugated shipping containers. Great Northern was appointed the exclusive sale agent for all of Great Southern's pulp and paper products. Great Southern's plant used nearby pulpwood to manufacture its linerboard. The company transported finished products by river or by its wholly owned Chattahoochee Industrial Railroad. It employed over 400 unionized workers.

Great Southern was merged into Great Northern in 1965. The merger promised to diversify the companies geographically, to allow production of various types of paper (newsprint, specialty papers, and kraft linerboard), and to provide funds for the expansion of the Great Southern mill. Great Southern's stock and bonds were transferred to Great Northern. Great Northern issued $10 million in 4.25 percent convertible subordinated sinking fund debentures in 1966 in order to fund new machines at the Cedar Springs plant, one to produce kraft linerboard and the other to produce corrugated material. In 1965 Great Northern had $221 million in sales. By 1969 the company manufactured and sold about 1.76 million tons of papers, containerboard, and pulp, for $344 million in sales.

In 1970 Great Northern went through another major merger, this time acquiring the Nekoosa-Edwards Paper Company. The company was renamed the Great Northern Nekoosa Corporation. Nekoosa-Edwards was a Wisconsin paper company, founded as the Nekoosa Paper Company in 1883. A merger in 1908 created the Nekoosa-Edwards Paper Company. Nekoosa-Edwards expanded into fine paper production in the 1930s, with continued growth through the 1950s.

By acquiring Nekoosa-Edwards, Great Northern Nekoosa was able to expand the types of papers it sold, including business papers and forms, newsprint, groundwood papers, and containerboard. It also expanded its holdings in the Midwest. After the merger of Great Northern and Nekoosa-Edwards, the newly merged corporation issued 500,000 shares of common stock in the Great Northern Nekoosa Corporation. In December 1970, when the stock was first issued, it sold for $40.375 a share; after underwriting charges, GNN raised $19.3 million to pay off $14.8 million in debt.

In 1972 Great Northern Nekoosa's revenues jumped 47 percent over the previous year, benefiting from a boom in plywood used in housing, strong export sales, and good sales in business papers.

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