The bid for Groupe Paper Excellence to acquire Resolute Forest Products was validated by the Competition Bureau on Thursday, allowing the $2.7 billion transaction to proceed for the first half of 2023.
• Also read: A new step in selling Resolute Forest Products
• Also read: Domtar acquires Resolute Forest Products
Paper Excellence’s subsidiary, Domtar Corporation, has therefore agreed to sell the Dryden pulp mill and Thunder Bay to two independent buyers, who have been approved by the Commissioner of Competition to complete this acquisition to resolve the Bay pulp and paper mill’s competition concerns that arise from the proposed transaction,” the bureau said in a statement.
The two companies also announced this decision the day before, specifying that Domtar will acquire all of Resolute’s outstanding common shares at a price of $20.50 per share. A contingent value right, which is tied to any refunds of customs deposits up to a value of US$500 million, is also part of the agreement.
The British-Colombian company Papier Excellence could become one of the major players in the forest industry in Quebec with this transaction, validated by Resolute shareholders at the end of October and controlled by the Indonesian investor family Widjaja, Papier Excellence had had last July pledged that it intends to preserve Resolute’s Quebec jobs, lumber mills and pulp and wood mills. We will work with them in this direction,” said Mathieu St-Amand, communications director for Minister for the Economy Pierre Fitzgibbon.
Keep in mind that Resolute is one of the top logging rights holders in Quebec with 4,109,750 m3, well ahead of Arbec in second place with 2,252,000 m3.
In May 2021, the Domtar subsidiary – another century-old paper company in the province of La Belle – was acquired by the same group for nearly $4 billion. With this transaction, Paper Excellence held 12% of the timber industry’s 20.7 tonne annual capacity, according to data from market research group Fisher International.
However, those multiple purchase deals caught the attention of several environmental groups, including Canopy Planet, who felt it was dangerous to give a single company so much power in this key sector in the fight against climate change.
Greenpeace also published a report critical of the company for its collaborations with other companies that have poor environmental practices. The association specifically targeted Asia Pulp and Paper, accusing it of clearing 2 million hectares of tropical forest in Indonesia.