Domtar, Paper Excellence Merger Receives Canadian Competition Bureau Approval

Rhea-AI Summary

Domtar Corporation (NYSE: UFS) and Paper Excellence B.V. have received Canadian Competition Act approval for their merger, wherein Karta Halten B.V. will acquire all outstanding shares of Domtar for $55.50 per share in cash. The approval fulfills the final condition for closing the transaction, anticipated in Q4 2021, after the divestiture of Domtar’s pulp mill in Kamloops, British Columbia, addressing competition concerns regarding the wood fibre market in the Thompson/Okanagan region.

Positive

• Canadian Competition Act approval received, enabling merger closure.
• Agreed acquisition price of $55.50 per share may enhance shareholder value.
• Merger expected to complete in Q4 2021, facilitating strategic growth.

Negative

• Sale of Kamloops pulp mill required to mitigate competition concerns.
• Potential operational challenges in the transition post-merger.

(All financial information is in U.S. Dollars)

RICHMOND, British Columbia & FORT MILL, S.C.--(BUSINESS WIRE)-- Paper Excellence B.V. (“Paper Excellence”) and Domtar Corporation (NYSE: UFS) (TSX: UFS) jointly announced that they have received Canadian Competition Act approval for their business combination whereby 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 pursuant to an agreement and plan of merger dated May 10, 2021 (the “Merger”).

The consent agreement filed by the Canadian Commissioner of Competition (“Commissioner”) with the Competition Tribunal today fulfills the final condition to the closing of the Merger. The consent agreement requires that, following the closing of the Merger, Domtar’s pulp mill in Kamloops, British Columbia be sold to resolve the Commissioner’s concerns about the Merger’s implications on the purchase of wood fibre from the Thompson/Okanagan region in British Columbia.

The transaction remains on course to close in the fourth quarter of this year.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211118006347/en/

Paper Excellence Contacts



Media

Ross Lovern / Hallie Wolff Kekst

Tel.: 917-842-7205 / 917-842-1127



Domtar Contacts



Investors & Media

David Struhs

Vice-President

Corporate Services & Sustainability

Tel.: 803-802-8031

Source: Domtar Corporation

FAQ

What is the acquisition price for Domtar Corporation (UFS) by Paper Excellence?

The acquisition price is $55.50 per share in cash.

When is the merger between Paper Excellence and Domtar expected to close?

The merger is anticipated to close in the fourth quarter of 2021.

What condition was required for the merger approval by Canadian authorities?

The sale of Domtar's pulp mill in Kamloops, British Columbia, was required to address competition concerns.

What are the implications of the merger for Domtar's operations?

The merger may enhance shareholder value but poses potential operational challenges during transition.