Filed by The Mead Corporation
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under
the Securities Exchange Act of 1934
Subject Company: The Mead Corporation
Commission File No. 1-2267
A Conversation with
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Jerry Tatar and John A. Luke, Jr.
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MeadWestvaco
December 2001
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements in this discussion and elsewhere by management of Mead
and Westvaco that are neither reported financial results nor other
historical information are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such information
includes, without limitation, the business outlook, assessment of market
conditions, anticipated financial and operating results, strategies, future
plans, contingencies and contemplated transactions of the companies. Such
forward-looking statements are not guarantees of future performance and are
subject to known and unknown risks, uncertainties and other factors which
may cause or contribute to actual results of company operations, or the
performance or achievements of each company, or industry results, to differ
materially from those expressed, or implied by the forward-looking
statements. In addition to any such risks, uncertainties and other factors
discussed elsewhere herein, risks, uncertainties and other factors that
could cause or contribute to actual results differing materially from those
expressed or implied for the forward-looking statements include, but are
not limited to, events or circumstances which affect the ability of Mead
and Westvaco to integrate successfully and achieve the anticipated benefits
of the transaction; competitive pricing for each company's products;
changes in raw materials; energy and other costs; fluctuations in demand
and changes in production capacities; changes to economic growth in the
U.S. and international economies, especially in Asia and Brazil; government
policies and regulations, including, but not limited to those affecting the
environment and the tobacco industry; and currency movements. Mead and
Westvaco undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise. Investors are advised, however, to consult any further
disclosures made on related subjects in each company's reports filed with
the SEC.
Moderator: We're here today with Jerry Tatar, Chairman and CEO of
the Mead Corporation, and John Luke, Jr., Chairman and
CEO of Westvaco, to discuss the progress leading to the
merger of their two companies. Welcome, gentlemen.
Jerry Tatar: Thank you.
John Luke, Jr.: Thank you.
Moderator: Let's begin with the question I'm sure you've been asked
frequently since the proposed merger between Mead and
Westvaco was announced on August 29th. Why does this
merger make sense?
Jerry Tatar: John, you're on.
John Luke, Jr.: Okay, (Laughs)
It is an opportunity to dramatically increase shareholder
value for both companies. Importantly, it is an
opportunity to create a strategic platform with four key
business segments, coated printing papers, packaging,
consumer and office products, and specialty chemicals,
which will be comprised of businesses that are leaders in
their market, global in focus, and unparalleled in terms
of its competitive potential.
Moderator: You've used the word "exciting" to describe this merger.
Now, why should Mead and Westvaco customers, employees
and shareholders be excited about the creation of
MeadWestvaco?
Jerry Tatar: Well, exciting usually means that it's a big change. And it
usually means that it's positive. And for both our employees
and our customers, what we're creating here is going to
allow us to make sure that we can provide the very best to
our customers, and that our employees have the opportunity
to grow and prosper within the new company. It's going to be
very exciting and very challenging.
Moderator: Terrific. What are the advantages of a merger of equals
compared to an acquisition?
John Luke, Jr.: I'll begin. A merger of equals really enables both companies
to come together without either one having to take on a
tremendous amount of debt to acquire the other. What we
will have coming out of this is a wonderfully strong
company with a capacity to return value to our
shareholders, and to create the growth opportunities that
will be important for our customers and our employees.
Jerry Tatar: The other thing I might add is that, in a merger of equals,
we can pick the best. We can put in the best processes
from the two companies, or even create new processes, if
that's the right thing to do. We can select the best
providers of goods and services. So in an acquisition,
the acquirer kind of rules, but in this case, we're going
to find the best from both companies and put them in
place.
Moderator: That's great. You've stated that a primary goal of the
merger is to achieve synergies. Why is this so important?
Jerry Tatar: Right out of the box, we're going to get about a dollar
of synergies on a per share basis and it will create
credibility with our investors. Hopefully, we can
translate that dollar in the market share price, the
investors will see an immediate gain, and it will just
get us started off on the right foot. But as John
indicated, the whole purpose of this is not really the
short term synergies, it's a nice plus, but it's really
the long term platform for growth that we're really
trying to create.
John Luke, Jr.: But there is, I would add, tremendous opportunity in the
short run through substantial cost savings to strengthen
the quality and character of the business platform we're
creating, so that as we go forward we will be able to
compete even more strongly.
Moderator: Hum, okay. Cutting costs is one way the new company will
achieve this goal. How will MeadWestvaco's cost reduction
efforts affect their employees?
Jerry Tatar: I'll start it. There's going to be a part of it that's
going to be tough. There is some duplication when you
bring two companies together, and part of the synergies
will be getting that refined and getting that trimmed
down. And because of that, there will be dislocations.
We'll do everything possible to make that happen through
attrition, retirements, and do it as smoothly as
possible. But there's going to be other kinds of cost
cutting that's really going to be in the hands of the
employees, where we're purchasing things and using our
leverage, where we're learning from each other on how to
improve our productivity in woodlands, how to install our
ERP systems in a better, quicker fashion. So there's
going to be a lot of the cost cutting that's actually
just challenging that we're going to rely on the
employees. But there will be some employee reductions
that we'll get through early, and we'll do it in the best
possible way.
John Luke, Jr.: And I would just add that while there will be job
elimination in certain cases, for the majority of current
MeadWestvaco employees, the cost cutting initiatives that we
will be undertaking will again, as I noted earlier, create a
stronger platform which will give us tremendous
opportunities for growth for those individuals who remain a
part of the organization. And that will be the majority.
Moderator: That's terrific. You have 16 integration teams in place
preparing for the day when the merger is finalized.
You're both smiling, that's good. (Laughs) How would you
rate the progress of this integration effort?
Jerry Tatar: John?
John Luke, Jr.: The progress is absolutely fantastic. We have individuals
working virtually day and night as members of those
teams, in addition to holding down their day jobs.
They are contributing measurably to the ideas that will
enable us, as Jerry noted earlier, to pick the best,
whether it's the best ... either one the company is
doing, or the best processes from outside the company.
What we will end up as a result of that is a very, very
creative and strong business platform. But the teams are
working well together, and that bodes well, we believe
strongly, for the working relationships of future
MeadWestvaco employees as we go forward.
Jerry Tatar: The chemistry in these groups has been terrific.
Moderator: Great.
Jerry Tatar: And it's really been nice to watch them come together,
because you just didn't ... we weren't sure. And now
we've seen them in action for almost three months and I
know I feel better every time I meet with them. The
chemistry is excellent.
John Luke, Jr.: But I think the chemistry is great. The energy is
terrific. And the energy to us reflects the excitement
that we talked about earlier that's broadly a part of his
whole merger.
Moderator: Shareholders and employees would also like to see strong
profitability and growth. How will MeadWestvaco be
positioned to achieve this?
Jerry Tatar: We're going to be a wonderful shape. As John indicated to
start this, the reason we're doing this is to create
shareholder value.
And, we're going to do that by creating this wonderful
platform for the future and for future growth. And our
investors, we'll ... they'll see it first off on the
synergies when we translate that into the ... hopefully
the dollar per share. Or hopefully even more. And then
they're going to see it, because the way you create value
is to get the most out of the assets you have. And we
have every intention of getting the returns of this
business above cost of capital and sustain it over a long
period of time, and then growing the pie. And the neat
thing about our portfolio is we're going to have
businesses like specialty paper and consumer and office
products and specialty chemical and packaging and paper,
that we're going to be able to grow those through organic
growth. We're going to rely on innovation and creativity.
We're not always going to have to spend a lot of capital
money to do it. And shareholders are really going to
appreciate it, but we're going to be depending on
employees to come up with those ideas.
Moderator: Could you add anything on that...
John Luke, Jr.: No, I think Jerry summed it up well.
Moderator: The regulatory hurdles required for the merger have
almost been cleared, and you are now approaching the
shareholder vote. What are the prospects for approval?
John Luke, Jr.: Well, we think the prospects for approval are excellent.
Jerry and I since August 29th when we announced our
plans, have met continuously with groups of investors,
and we've had nothing but very positive response. That
said, we take nothing for granted, and we will continue
right up through the vote to meet and answer any and all
questions that our shareholders raise.
Moderator: Terrific. When do you expect the merger to be completed?
Jerry Tatar: Well, right now it looks like it's going to slip over
into early next year. We still have to get the SEC to
approve the materials that we're putting together. We
have no substantive issues with them we believe, but it's
taken a little longer than we thought. So right now if we
had to guess, I think we'd guess mid year.
Moderator: Okay.
Jerry Tatar: Oh, excuse me, mid January. Not mid year.
Moderator: You both obviously have great expectations of a bright
future for MeadWestvaco. So from your perspective, how
would you characterize the single most important
attribute of this new company?
John Luke, Jr.: I will begin. I think creativity. What we are putting
together is a business platform that will be unparalleled
in its strength, and the strength, aside from financial
strength, it will really be driven by a strong market
focus that will be continually fueled by an emphasis on
creativity. Creativity that stirs imagination in the
organization and fuels innovation, which is going to be
critical to the ongoing future strategic progress of
MeadWestvaco.
Jerry Tatar: And if I'd add one thing to that, it would be the issue
of involvement. To get creativity, we have to make sure
that every employee feels like they're part of the
action, and that they'll have a full opportunity to use
their mind and their ideas, get a platform for those, and
have the chance to implement them. And so with ... what
we're asking, which is creativity, we have a
responsibility of providing the platform that they can
get involved and help us get this whole thing done.
Moderator: That's great. It does sound exciting.
Jerry Tatar: It should be exciting.
Moderator: Good. My final question is, what can employees do to help
make the merger--and MeadWestvaco--a new industry leader
and a success?
Jerry Tatar: When we bring these companies together, we will have
enabled this new company to be just that, the finest
forest products company. The facts are there. We're going
to be leaders in paper, coated paper, specialty paper,
packaging, specialty chemicals, consumer and office
products. We're going to give the people an opportunity
to do that. But, we have to make sure is that the people
have the opportunity to unleash that creativity and that
drive to put in the best.
The vision we've had for this all along is the only
reason for making a decision in this new company is what
is best for MeadWestvaco. It doesn't matter if it was
something from the Mead Corporation, something from
Westvaco, or something brand new. The only thing that
matters is what's best for the new company.
John Luke, Jr.: Oh, I would ... I would agree. I think that there's
tremendous opportunity for engagement and involvement
when we go asking people from both companies to undergo a
great deal of change in the coming weeks and months, and
engage and believe and contribute to the power of what
we're creating.
Moderator: Terrific. Is there anything either one of you want to add
that you feel you haven't covered yet?
Jerry Tatar: I'll just add it's been...it's a lot of fun. John and I
started meeting in ... well, we've known each other for
four or five years. Occasionally we had talked about
something like this, but we were doing our independent
things. But back in January we had a chance to talk and
... and it's just...the ideas started to come together,
and as we talked more the excitement grew. And, so by the
time we ... we met in Canton, Ohio, and shook hands, kind
of said on a conceptual basis that this made sense. And
then we turned to our senior management teams and said,
"Hey, we've got all these great concepts. Are you sure
we're doing the right thing?" And they got together for
three or four weeks and provided a lot of good details
that made us feel good that we were doing the right
thing. And since then, like we both say, the ... the
teams have come together and it's really great. So I
think we wish we could get this thing started tomorrow,
but it looks again like it will probably be, mid January
or somewhere about there.
John Luke, Jr.: And I think during the period between our first
conversations and the public announcement of this in
August, we have ... we have had a lot of fun. It's been
hard work for an awful lot of people, but we have all
come away convinced more than ever of the opportunities
that two organizations that have proven they can work
together wonderfully well can create. And the strategic
platform that we will have will be unparalleled in this
industry as we go forward.
Moderator: Gentlemen, thank you so much. I love that story. It
sounds like you've had a terrific relationship, and I'm
sure that will carry through in the new merger. So again,
thank you, best of luck. (Laughs)
John Luke,Jr.: Thank you very much.
Jerry Tatar: Thank you very much, it's been great.
(MUSIC UP)
Mead Closing Frame:
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Please let us know if you have additional questions:
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Phone: 1-888-918-6323
E-mail: Vision ID CORPCOMM
(or corpcomm@mead.com)
-----------------
Visit "Mead & Westvaco" on the homepage
of the Mead Intranet for updates.
Westvaco Closing Frame:
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Please let us know if you have additional questions:
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Phone: 1-866-227-6441
For updates,
visit the
Mead & Westvaco Integration Site
on the Westvaco Intranet.
Legal Disclaimer:
The Mead Corporation ("Mead") and Westvaco Corporation ("Westvaco") have
filed with the SEC a registration statement on Form S-4 on behalf of MW
Holding Corporation containing a preliminary joint proxy
statement/prospectus and other relevant documents concerning the proposed
transaction. INVESTORS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC
BECAUSE THEY CONTAIN IMPORTANT INFORMATION ON THE PROPOSED TRANSACTION.
Investors may obtain the documents free of charge at the SEC's web site
(http://www.sec.gov). In addition, documents filed with the SEC by Mead or
Westvaco with respect to the proposed transaction may be obtained free of
charge by contacting The Mead Corporation, Mead World Headquarters,
Courthouse Plaza Northeast, Dayton, Ohio 45463, Attention: Mark Pomerleau,
Director of Investor Relations (tel.: (937) 495-3456), or Westvaco
Corporation, One High Ridge Park, Stamford, Connecticut 06905, Attention:
John W. Hetherington (tel.: (203) 461-7500). INVESTORS SHOULD READ THE
JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING ANY VOTING OR
INVESTMENT DECISION. Mead and Westvaco and their respective directors and
executive officers may be deemed to be participants in the solicitation of
proxies from Mead shareholders and Westvaco shareholders, respectively, in
connection with the proposed merger between Mead and Westvaco. For more
information on who may be deemed to be participants in the solicitation of
proxies, please see Mead and Westvaco's Current Report on Form 8-K filed
with the SEC on October 18, 2001.
Total Running Time: 12 minutes 42 seconds