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$3B Domtar sale passes final requirement

Purchase by Paper Excellence has received the OK from competition commissioner
Domtar - Dryden mill (1)
Domtar's Dryden mill (File photo)

Richmond, B.C.-based forest products company Paper Excellence has moved a step closer to finalizing its $3-billion purchase of Domtar.

On Nov. 18, the two paper companies jointly announced the acquisition has received approval under the Canadian Competition Act.

According to the deal, announced last May, Karta Halten B.V., an affiliate of Paper Excellence, will acquire all issued and outstanding shares of Domtar common stock for $55.50 per share, in cash. Stakeholders gave the deal their approval in July.

To meet the standards set out by the Canadian Competition Act, Paper Excellence will be required to sell Domtar’s pulp mill in Kamloops, B.C., after the merger concludes.

The move aims to alleviate concerns of the Canadian Commissioner of Competition about how the sale would impact the purchase of wood fibre from the Thompson/Okanagan region in British Columbia.

The transaction is expected to close by year’s end.

Paper Excellence operates eight kraft and pulp mills in British Columbia, Saskatchewan and Nova Scotia. Their Canadian facilities employ 3,000 with production of more than 3 million tonnes in pulp, printing and writing, packaging, and specialty paper.

Paper Excellence Brazil was established in 2017 with 49.41 per cent interest in a mill with a company-owned eucalyptus forest.

In acquiring South Carolina-headquartered Domtar, Paper Excellence picks up 13 pulp and paper mills and 10 manufacturing and converting facilities across North America with 2.7 million tons of papermaking capacity and 1.5 million air-dried metric tonnes of market pulp capacity.

In Northern Ontario, Domtar has a pulp mill in Dryden and a pulp and paper mill in Espanola.