Operations & Management
Paper Excellence Group set to acquire Resolute Forest Products through Domtar
July 6, 2022 By P&PC Staff
The Paper Excellence Group, through its wholly-owned subsidiary Domtar, has entered into a definitive agreement to acquire Resolute Forest Products. As per this agreement, Domtar will acquire all of the outstanding common shares of Resolute stock.
The Paper Excellence Group is further expanding its portfolio in North America with this new addition after acquiring Domtar in 2021.
“We are excited to welcome Resolute and its employees to the Paper Excellence family. Resolute is an ideal fit for our long-term growth strategy. It complements our existing pulp, paper and packaging businesses and adds capabilities in lumber and tissue. We have seen firsthand that Resolute prides itself on its great people, strong assets and a culture of excellence going back more than two hundred years,” said Patrick Loulou, vice-chair and chief strategy officer of the Paper Excellence Group.
After the acquisition, Resolute will be a wholly-owned subsidiary of Domtar. It will function under the auspices of the group and continue to operate under the Resolute name. The management team at Resolute will remain in place and operate from the company’s headquarters. With the combined workforce of Domtar and Resolute, Montreal will become an important hub for the group’s North American businesses. The Paper Excellence Group plans to retain Resolute’s production locations and levels of jobs.
“With this transaction, Resolute will accelerate its growth as it gains access to more tools, capital and opportunities to pursue our ambitions with the combined resources of the Paper Excellence Group,” said Remi G. Lalonde, Resolute’s president and chief executive officer. “This is good for employees and the communities where Resolute operates because we will continue to grow in a manner consistent with our core values of accountability, caring and trust that we hold dear. Together, we will form a stronger and more resilient, diversified forest products company, positioned to compete on a truly global scale, with a shared commitment to being a trusted business partner, dedicated to sustainability and to caring for its people and communities.”
Paper Excellence plans on supporting Resolute management’s existing growth strategy which is focused on strategic investments in its lumber and pulp businesses and maximizing the value of its paper and tissue businesses. The group will also do a detailed feasibility study for the eventual conversion of Resolute’s Gatineau, Quebec, newsprint mill to the production of packaging paper.
“This is a good example of how the Paper Excellence group’s diversified business, financial resources, and technical capabilities can open up new strategic avenues for assets that may otherwise face an uncertain future. This is but one example of our support and intention to implement significant investments aligned with Resolute’s strategic plan for the future,” said Loulou.
Paper Excellence also plans on entering into long-term partnerships with one or more universities in Quebec and Ontario to spearhead innovation in the field of fibre-based biomaterials.
The transaction will be carried out by way of a merger of Resolute with a newly created subsidiary of Domtar, providing for conversion of each share of Resolute common stock into the right to receive $20.50 per share, together with a CVR entitling the holder to a share of future softwood lumber duty deposit refunds. Each share, on a fully diluted basis at closing, will be entitled to receive one CVR.
“The addition of Resolute enables us to continue executing our long-term business plan to drive growth to the benefit of all stakeholders,” said John D. Williams, president and chief executive officer of Domtar. “After the close of the transaction, the Paper Excellence Group will own or operate a collection of diverse, strategic assets across North America that allows us to deliver a wider range of high-quality products to our customers. This transaction continues to demonstrate the strong belief in the potential of our business model and we look forward to continuing to operate successfully and efficiently into the future.”
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