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The Paper Excellence Group, through Domtar, its wholly-owned subsidiary, announced the acquisition of Resolute Forest Products in a transaction valued at $2.7 billion, subject to regulatory approvals. shareholders.

Under the agreement, Resolute will become a wholly-owned subsidiary of Domtar, which will acquire all outstanding common shares, and both companies will continue to operate independently under their own names.

Domtar, headquartered in Fort Mill, South Carolina, was acquired by British Columbia-based Paper Excellence in December 2021 in a deal valued at around $3 billion, with officials saying at the time that the decision was to broaden the company’s reach and broaden its product line. to include nonwovens and air-laid containerboard as well as increased pulp and paper production.

Similarly, Paper Excellence says the acquisition of Resolute further expands its reach by expanding its portfolio of forest products in North America. “This acquisition strengthens Paper Excellence Group’s core pulp and paper business and diversifies its product offering by adding tissue paper and wood products segments,” said John D. Williams, President and Chief Executive Officer of Domtar.

Patrick Loulou, Vice President and Chief Strategy Officer of Paper Excellence, said, “Resolute is the ideal fit for our long-term growth strategy. It complements our existing pulp, paper and packaging businesses and adds capabilities in lumber and fabrics.

The agreement also outlines a commitment to build a leading diversified North American forest products business and create long-term growth by supporting Resolute’s management’s existing growth strategy, which focuses on strategic investments in its lumber and pulp businesses while maximizing the value of its paper and tissue businesses. . The companies will also conduct a detailed feasibility study for the eventual conversion of Resolute’s newsprint mill in Gatineau, Quebec, to the production of packaging paper.

“With this transaction, Resolute will accelerate its growth by accessing more tools, capital and opportunities to pursue our ambitions with the combined resources of the Paper Excellence Group,” said Resolute President and CEO Remi G.Lalonde. “Together, we will form a stronger, more resilient and diverse forest products business, positioned to compete on a truly global scale.”

Paper Excellence reports production of 2.8 million metric tonnes of pulp and paper from the acquisitions of Eldorado Brazil Celulose in Brazil and Catalyst Paper in British Columbia in 2019, as well as the acquisition of Domtar last year last.

According to Resolute, it adds to the Paper Excellence portfolio 1.1 million metric tons of pulp capacity, 116,000 metric tons of tissue paper capacity, seven paper mills totaling 1.5 million metric tons of capacity and 22 pulp and paper mills. wood.

Domtar is also continuing to move forward on its Kingsport, Tennessee conversion project, announcing last month that it is on track and expected to be completed by the end of this year. The company’s first 100% recycled packaging plant will produce approximately 600,000 tonnes per year of containerboard with recycled content and consume 660,000 tonnes per year of old corrugated packaging and mixed paper.

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