- Paper Excellence Group subsidiary Domtar will acquire Resolute Forest Products (RFP)
- The cash consideration represents an enterprise value of US$2.7B or US$20.50 per share, a premium of 64 per cent to Resolute’s closing price on the NYSE on July 5, 2022
- Each share will entitle its holder to a CVR representing a share of future softwood lumber duty deposit refunds
- The parties expect the transaction to close in the first half of 2023
- Resolute is a global leader in the forest products industry with a presence in over 60 countries
- Resolute Forest Products (RFP) is up by 65.37 per cent trading at $26.82 per share
Paper Excellence Group subsidiary Domtar will acquire Resolute Forest Products (RFP).
The Paper Excellence Group is a privately-held holding company that oversees individual pulp and paper business units. It produces over 7M tonnes of product annually across Europe and the Americas.
Domtar is a leading provider of fiber-based products including communication, specialty and packaging papers, market pulp and airlaid nonwovens.
The cash consideration represents an enterprise value of US$2.7B or US$20.50 per share, a premium of 64 per cent to Resolute’s closing price on the NYSE on July 5, 2022.
Each share will entitle its holder to a CVR representing a share of future softwood lumber duty deposit refunds.
Under the CVR, stockholders will receive any refunds on approximately US$500M of deposits on estimated softwood lumber duties paid by Resolute through June 30, 2022. The value will be determined by the resolution of the softwood lumber dispute between Canada and the United States.
Resolute will become a wholly owned subsidiary of Domtar and continue to operate under current management under the Resolute name.
Paper Excellence will support Resolute’s existing growth strategy focused on investments in its lumber and pulp businesses, optimizing its paper and tissue businesses, and evaluating the conversion of its Gatineau newsprint mill to the production of packaging paper.
Resolute shareholders will vote on the transaction in early fall. The merger will require majority approval.
Fairfax Financial Holdings, which owns approximately 40 per cent of Resolute, has entered into a voting and support agreement to vote in favor of the transaction.
The parties expect the transaction to close in the first half of 2023. The transaction follows Paper Excellence’s acquisition of Domtar last year.
“Resolute is an ideal fit for our long-term growth strategy,” stated Patrick Loulou, Vice Chair and Chief Strategy Officer at Paper Excellence. “It complements our existing pulp, paper and packaging businesses and adds capabilities in lumber and tissue.”
“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,” stated Remi G. Lalonde, Resolute’s President and CEO. “Together, we will form a stronger and more resilient, diversified forest products company, positioned to compete on a truly global scale.”
Resolute is a global leader in the forest products industry with a presence in over 60 countries.
Resolute Forest Products (RFP) is up by 65.37 per cent trading at $26.82 per share as of 10:02 am EST.
