- The Washington Times - Wednesday, March 26, 2003

Here is a look at more of Wednesday's top business stories:

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3M to take $85 million charge

ST. PAUL, Minn., March 26 (UPI) — 3M Co. said it will record an $85 million pretax charge in the first quarter and pay $68 million to competitor LePage Inc. following an appeals court ruling that reinstated a 1999 jury decision.

3M said LePage, a transparent tape competitor, brought antitrust claims against 3M in 1997 that focused on specific rebate programs involving transparent tape and other products.

3M, the maker of Scotch tape, said it discontinued such programs more than three years ago.

Last year, a panel of the Third Circuit court set aside the jury verdict that called for 3M to pay LePage $22.8 million. That amount automatically was tripled under the law to more than $68 million, 3M said.

The company plans to petition the U.S. Supreme Court to review the ruling by the U.S. Court of Appeals for the Third Circuit. The Supreme Court is not likely to decide whether it will hear the appeal until the fall.

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Riverwood Holding and Graphic Packaging to merge

ATLANTA, March 26 (UPI) — Riverwood Holding Inc. and Graphic Packaging International Corp. said they have agreed to merge in a stock deal that will create a global paperboard company with a combined company value of about $3 billion.

The global paperboard company will serve the beverage, food and consumer products industries, the companies said.

Jeffrey Coors, Graphic Packaging's chairman and chief executive, said, "Our objective is to achieve accelerated growth in the global consumer, food and beverage packaging industries by capitalizing on the best from each organization."

Graphic Packaging, based in Golden, Colo., manufactures folding cartons. Riverwood provides packaging products to multinational beverage and consumer-products companies.

The transaction, which has been approved by the boards of both companies and the shareholders of Riverwood, is expected to close in the third quarter, subject to regulatory and shareholder approvals.

Graphic Packaging said its shareholders will receive one share of Riverwood for each share of Graphic Packaging they own, following a stock split by Riverwood.

Riverwood shareholders will own 57.5 percent of the new public company, while Graphic Packaging shareholders will own the remaining 42.5 percent. Shares of the new company are expected to trade on the New York Stock Exchange.

The combined company will employ more than 8,000 people on four continents and will have headquarters in Atlanta. It also will have 2002 pro forma revenue of about $2.3 billion and earnings before interest, taxes, depreciation and amortization of more than $400 million, the companies said.

Management of both companies have identified operating synergies of $55 million a year, which are expected to be fully realized in the third year after closing.

Coors will serve as executive chairman of the combined company, and Riverwood President and CEO Steve Humphrey will be president and CEO. David Scheible, Graphic Packaging's chief operating officer, will become executive vice president of commercial operations for the combined company.

Credit Suisse First Boston acted as financial adviser to Graphic Packaging, and Goldman Sachs & Co. advised Riverwood.

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Digital television use expected to rise

LONDON, March 26 (UPI) — There will be 96.7 million digital television households worldwide by the end of the year, according to a new report by Informa Media Group.

TV International Sourcebook 2003 indicates that the end-2003 figure represents a 15.5 million increase on the end-2002 figure.

The report, which covers 50 countries, states that the 2003 figure gives 10 percent penetration of global TV households, though the proportion is as high as 42 percent in North America.

The number of digital homes in North America is expected to reach nearly 50 million by end-2003, representing 51 percent of the global total. The United States alone will contribute 45 million, with the United Kingdom in second place with 10.8 million digital homes.

Digital DTH/DBS platforms, such as DirecTV in the U.S. and British Sky Broadcasting in the United Kingdom, will supply 55 million, or 57 percent, to the total.

However, digital cable is gaining ground fast, adding 9 million homes in 2003 to bring its total to 37 million, or 39 percent, of the total by year-end 2003.

Digital terrestrial television is likely to double its numbers in 2003 despite high profile closures of subscription packages in the United Kingdom and Spain.

DTT is expected to benefit from free services such as Freeview in the United Kingdom and the rollout of services in several countries.


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