Chesapeake Corporation Completes Sale of Its Interest in Georgia-Pacific Tissue Joint Venture.

Business Editors

RICHMOND, Va.--(BUSINESS WIRE)--March 2, 2001

Chesapeake Corporation (NYSE:CSK) today announced it has completed the sale of its 5 percent interest in Georgia-Pacific Tissue, LLC, a commercial and industrial tissue business, to Georgia-Pacific Corporation (NYSE:GP). Chesapeake received $237 million for its agreement to terminate the joint venture, consideration for the sale of its ownership interest and certain indemnifiable deferred tax liabilities.

Georgia-Pacific Tissue was a joint venture created between Georgia-Pacific Corporation and Chesapeake in 1999, in which Chesapeake contributed the assets of its Wisconsin Tissue business in exchange for an initial cash distribution of approximately $755 million and a 5 percent interest in the joint venture. The sale of Chesapeake's interest in the joint venture coincides with Georgia-Pacific's sale of its commercial and industrial tissue business to Svenska Cellulosa Aktiebolaget SCA (publ), which also was completed today.

The cash received from Georgia-Pacific will result in a one-time after-tax gain to Chesapeake of approximately $140 million, or $9 per share. The termination of the joint venture will require income tax payments by Chesapeake in 2001 of approximately $295 million, which will be payable in installments starting in June 2001.

Commenting on the sale, Chesapeake Chairman, President and Chief Executive Officer Thomas H. Johnson said, "We are pleased to complete the sale of our interest in Georgia-Pacific Tissue. With this final step in the sale of Wisconsin Tissue, we are now completely focused on specialty packaging. Since 1999, we have become one of the largest and best positioned specialty packaging companies in Europe, with an emphasis on markets that provide opportunities to differentiate our products and services through distinct competitive advantages."

Chesapeake Corporation, headquartered in Richmond, Va., is a global leader in specialty packaging. Chesapeake is a leading European folding carton, leaflet and label supplier and a leader in plastics packaging for niche markets. Chesapeake has over 75 locations in North America, Europe, Africa and Asia. Chesapeake's website is www.cskcorp.com.