By P&PC Staff
By P&PC Staff
Paper Excellence B.V. and Domtar Corporation jointly announced that they have received Canadian Competition Act approval for a business merger. Through this merger, Karta Halten B.V., an affiliate of Paper Excellence, will acquire all of the issued and outstanding shares of Domtar common stock for $55.50 per share in cash according to an agreement and plan of merger dated May 10, 2021.
The Canadian Commissioner of Competition filed the consent agreement, which fulfills the final condition for closing the merger, with the Competition Tribunal. As per the consent agreement, Domtar’s pulp mill in Kamloops, B.C. will be sold after the merger is completed. This is to resolve the Commissioner’s concerns about the implications of this merger on the purchase of wood fibre from the Thompson/Okanagan region in B.C.
The Competition Bureau also released a statement noting that the agreement was reached to address competition concerns of the merger of two of Canada’s largest pulp and paper manufacturers – Karta Halten B.V. (Paper Excellence) and Domtar Corp.
The Bureau stated that a review was conducted and concluded with the proposal of the sale of the Kamloops mill. It determined the proposed transaction is anti-competitive because it would provide Paper Excellence with monopsony power in a large part of southern B.C. This would allow Paper Excellence to pay lower than competitive prices to sawmills and other suppliers of wood fibre in a B.C. region where the company already has a high number of pulp mills. Following the merger, Paper Excellence will sell Domtar’s Kamloops mill to an independent purchaser that will be approved by the Commissioner of Competition.
The transaction is expected to close in the fourth quarter of this year.