New York, Nov. 14 (Reuters): Paper producer Georgia-Pacific Corporation agreed on Sunday to be bought by Koch Industries Inc. for $13.2 billion in a deal that would make it a privately held Koch subsidiary.

Georgia-Pacific, the maker of Quilted Northern bathroom tissue and Brawny paper towels, said the deal would allow it to operate and grow more efficiently, free from the obligations of a publicly traded company.

Koch will pay $48 for each Georgia-Pacific share ? a 39 per cent premium to the company’s closing stock price on November 11.

The deal comes as the US paper industry continues to see profits squeezed by high energy costs, Asian competition and overcapacity.

Georgia-Pacific’s third-quarter profit fell sharply from a year ago, though it beat market estimates. Sales were hurt by weak results from its box materials and pulp and paper segments.

“Being a privately held company allows us to make long-term investment decisions where you’re not having to watch stock prices on a daily basis,” said Georgia-Pacific spokeswoman Robin Keegan. “We feel that the private environment lends itself better to weathering the cyclical nature of commodities.”

Keegan added that operating as a private company would ease the burden of complying with Sarbanes-Oxley, a US corporate governance law.

Koch bought Georgia-Pacific’s non-integrated market and fluff pulp operations in May 2004, investing in the businesses operating under the name Koch Cellulose.

In a message to Georgia-Pacific staff on its website, Koch said it was that deal that sparked the takeover interest.