Anderson-Tully Company of Vicksburg and Memphis, a closely held corporation since 1889, will merge with a larger timber company, with all Anderson-Tully shares being acquired by The Forestland Group LLC., a combined news release issued today said.

There was no immediate word on how the ownership change would affect employment in Vicksburg, where Anderson-Tully, also known as ATCO, owns two sawmills and a veneer plant and employs about 500 people.

The development follows a 1998 announcement that Anderson-Tully would be bought by Arkansas-based Potlatch Corp. At that time, the merger was to have created Timberland Growth Corporation as a newly formed real estate investment trust. That deal was called off in May 1999 with declining market conditions cited.

While there was no definitive information about jobs, Chris Zinkhan, managing director of TFG, indicated normal operations.

“We have great respect for ATCO’s legacy,” he said in the news release. “The existing synergy between its Vicksburg sawmills, worldwide marketing organization and timberlands are important elements to the overall business value. Our cultures and values, especially with respect to sustainable management of forest and wildlife resources, are compatible, and we don’t anticipate major changes in the ATCO business.”

Anderson-Tully, which started as a firm making wooden shipping crates for produce, now owns more than 323,000 acres of hardwood timberland in Tennessee, Mississippi, Louisiana and Arkansas. The company is widely known for its effective management of the timberland, much of which is leased for sportsmen and agriculture. In 2000, ATCO received certification that its forests were responsibly managed in accordance with the Forest Stewardship Council Principles of Responsible Forest Management.

TFG, based in Chapel Hill, N.C., was formed in 1995 and manages 1.8 million acres of hardwood and pine forests for institutional, family and individial investors in 16 states, all in the eastern United States.

Under the merger, which has received unanimous approval from ATCO’s board of directors, TGF will acquire all shares of ATCO for approximately $500,000 per share, placing the value of the acquisition at $465 million.

Completion of the deal is subject to a TFG shareholder vote, clearance under the Hart-Scott-Rodino Antitrust Improvements Act and approval under the Mississippi River Timberlands Control Act.

The actual closing, expected in early 2006, will follow final inventory of ATCO holdings, and a determination of values. Anderson-Tully shareholders will receive approximately $450,000 per share in cash with the balance held in escrow pending resolution of other matters.

In the news release, Chip Dickinson, president and CEO of ATCO praised TFG, calling it “the only timberland management investment organization focused on naturally regenerating hardwood timberland.

“Aligning ATCO’s management, timberlands and sawmills with TFG and its substantial capital resources will allow for continued sustainable management of the timberlands and provide ATCO greater opportunities for expansion,” the news release said.