Features Research & Innovation
TAKEOVER: NORSKE SKOG CANADA BUYS PACIFICA, SELLS MACKENZIE

VANCOUVER, BC — In taking over Pacifica Papers Inc., Norske Skog Canada has become the third largest newsprint and specialty groundwood producer in North America. The boards of both companies have endorsed the deal and stocks rose at the announcement. The merged companies, which will use the Norske Skog Canada name, have projected a combined annual sales of $2.5 billion, with an expected savings of $60 million a year from the merger.

Norske Skog president and CEO Russell Horner said the proximity of the company’s Vancouver Island mills with Pacifica’s Port Alberni and Powell River, BC, operations offers synergies that no other two companies could achieve.

“With four mills located within a 100-mile (160 km) radius on the lower south coast, we will be creating a global-scale value-adding business that will benefit our stakeholders and the province of BC,” Horner stated.

At the same time, Norske Skog Canada has reached an agreement to sell its Mackenzie pulp mill, located in BC’s northern interior to Pope & Talbot Inc for US$123 million and 1.75 million shares of Pope & Talbot’s common shares. The transaction, which requires standard regulatory approvals, is expected to close in late May. Pope & Talbot already owns the Harmac pulp mill near Nanaimo, BC.