Kimberly-Clark to Evaluate Spin-Off

Kimberly-Clark Corp. announced that its board of directors has authorized management to evaluate a potential tax-free spin-off of the company's Neenah Paper and Technical Paper businesses along with its pulp and timber assets in Pictou, Nova Scotia, and Terrace Bay, Ontario.

A spin-off would create a publicly traded pulp and paper company with about $650 million in annual sales. The new company would produce a range of premium and specialty paper lines and more than 700,000 metric tons of pulp.

The businesses being evaluated for spin-off are all part of Kimberly-Clark's Business-to-Business segment. Although the businesses on a stand-alone basis would have approximately $650 million in annual sales, they represent less than 3 percent of K-C's annual net sales. It is expected that Kimberly-Clark would become one of the new company's largest customers through a pulp supply agreement.

Management is expected to complete its evaluation and present recommendations to the board of directors during the second quarter. If the board ultimately approves a spin-off, a transaction would likely be completed during the second half of 2004, subject to market, regulatory and other conditions. Goldman, Sachs & Co. has been retained to assist management in the evaluation process.