The Paper Excellence Group, through its wholly owned subsidiary Domtar Corporation, a diversified global manufacturer of pulp and specialty, printing, writing and packaging papers, and Resolute Forest Products, a global forest products company, have entered into an agreement under which Domtar will acquire all of the outstanding common shares of Resolute.
With this addition to its family of companies, the Paper Excellence Group will further expand its portfolio in North America, following the successful acquisition of Domtar last year.
«We are excited to welcome Resolute and its employees to the Paper Excellence family, » comments Patrick Loulou, Vicepresident and Chief Strategy Officer of the Paper Excellence Group.
«Resolute is ideal for our long-term growth strategy. It complements our existing pulp, paper and packaging operations and adds capabilities in the lumber and tissue business. We have seen first-hand that Resolute prides itself on its great people, strong resources and a culture of excellence that goes back more than two hundred years».
Resolute will become a wholly owned subsidiary of Domtar, under the Group umbrella, and will continue to operate as usual under the Resolute name. The Resolute management team will remain in place at the company’s headquarters. Given the quality workforce available with Resolute and Domtar, Montreal will become an important centre for the Group’s activities in North America. In addition, the Group plans to maintain Resolute’s production sites and employment levels.
Deal comes as North American paper stocks are low
Canadian pulp and paper manufacturer, Paper Excellence Group, has agreed to acquire Resolute Forest Products for 1.6 billion $ in cash in its second major deal in 14 months – in May 2021, Paper Excellence had in fact announced that it had agreed to acquire Domtar Corp. for about 2.8 billion $. The agreement was completed in November.
Holders of each Resolute share will receive 20.50 $ and a so-called contingent value on future redemptions of softwood lumber deposits. The deal comes as paper supplies in North America are expected to remain tight in 2023 after mills switched to paperboard to meet growing demand for boxes and packaging materials during the pandemic-fuelled e-commerce boom. Resolute, based in Montreal, is one of the world’s leading manufacturers of newsprint and is North America’s largest producer of paper used in flyers and retail magazines.