Underneath the proposal, the father or mother firm of Domtar Corp. can pay US$20.50 per Resolute share. The corporate may also maintain Resolute’s headquarters in Montreal.
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Jul 06, 2022 • 13 minutes in the past • 2 minute learn • Be part of the dialog
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The Paper Excellence Group has signed a deal to purchase Resolute Forest Merchandise Inc. in an settlement that values the corporate at US$2.7 billion.
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Patrick Loulou, chief technique officer of the Paper Excellence Group, stated Resolute is a perfect match for the corporate’s long-term development technique.
“It enhances our present pulp, paper and packaging companies and provides capabilities in lumber and tissue,” Loulou stated in an announcement.
Underneath the proposal, the father or mother firm of Domtar Corp. can pay US$20.50 per Resolute share, a 64 per cent premium to the share’s closing worth on Tuesday.
Resolute shareholders may also obtain a contingent worth proper that entitles the holder to a share of future softwood lumber responsibility refunds on roughly US$500 million of deposits paid by Resolute by way of June 30.
Resolute shares have been up C$10.46 at C$26.69 in buying and selling on the Toronto Inventory Change.
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Paper Excellence purchased Domtar final yr in a deal that valued the corporate at about US$3 billion.
The corporate stated Wednesday Resolute will turn out to be an entirely owned subsidiary of Domtar and proceed to function on a business-as-usual foundation below the Resolute title.
Resolute’s administration crew may also stay in place on the firm’s headquarters in Montreal.
Resolute CEO Rémi Lalonde stated the deal will assist development as the corporate beneficial properties entry to extra instruments, capital and alternatives with the mixed sources of the Paper Excellence Group.
“Collectively, we’ll type a stronger and extra resilient, diversified forest merchandise firm, positioned to compete on a very world scale, with a shared dedication to being a trusted enterprise companion, devoted to sustainability and to caring for its folks and communities,” Lalonde stated in an announcement.
Resolute sells a various vary of merchandise, together with market pulp, tissue, wooden merchandise and papers. It owns or operates some 40 services, in addition to energy era property, in the US and Canada.
The deal is topic to shareholder and regulatory approvals in addition to different customary closing situations. It’s anticipated to shut within the first half of subsequent yr.
Fairfax Monetary Holdings Ltd., which holds a 40 per cent stake in Resolute, has agreed to to vote its shares in favour of the transaction.
