To win US Government approval of its $11 billion acquisition of the Fort James Corp, the Georgia-Pacific Corp will have to sell its commercial tissue business.

The US Justice Department says the companies have agreed to the divestiture to resolve anti trust concerns over their original deal. The department’s antitrust division had filed a lawsuit saying it would have substantially reduced competition in production and sales of commercial tissue by reducing the number of major competitors from three to two.

The acquisition of Fort James would have made Atlanta based Georgia-Pacific the world’s largest supplier of tissue products. The companies – the two largest US producers of commercial tissue – manufactured a total of more than 3Mt last year and had nearly $25 billion in revenues. They sold a combined total of $2 billion worth of products, accounting for 66 per cent of commercial sales of bath tissue, paper towels and paper napkins.