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The Paper Excellence Group, through Domtar, its wholly owned subsidiary, has announced the acquisition of Resolute Forest Products in a deal valued at $2.7 billion, pending shareholder approval.

Under the agreement, Resolute will become a wholly owned subsidiary of Domtar, which will acquire all outstanding shares common stock, and both companies will continue to operate independently under their own names.

Domtar, headquartered in Fort Mill, South Carolina, was acquired by British Columbia-based Paper Excellence in December 2021 in a deal valued at about $3 billion, with officials saying at the time the move was to broaden the company’s reach and expand its product range to include air-laid nonwovens and containerboard as well as increased pulp and paper production.

Similarly, Paper Excellence says the Resolute acquisition further expands its reach by building out its forest products portfolio in North America. “This acquisition strengthens the Paper Excellence Group’s core pulp and paper business and diversifies their product offering by adding tissue and wood product segments,” Domtar President and CEO John D. Williams says.

Paper Excellence Vice Chair and Chief Strategy Officer Patrick Loulou says, “Resolute is an ideal fit for our long-term growth strategy. It complements our existing pulp, paper and packaging businesses and adds capabilities in lumber and tissue.”

The deal also outlines a commitment to building a premier North American diversified forest products company and creating long-term grown by supporting Resolute management’s existing growth strategy which focuses on strategic investments in its lumber and pulp businesses while maximizing the value of its paper and tissue businesses. The companies also will conduct a detailed feasibility study for the eventual conversion of Resolute’s Gatineau, Quebec, newsprint mill to the production of packaging paper.

“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,” Resolute President and CEO Remi G. Lalonde says. “Together we will form a stronger and more resilient, diversified forest products company positioned to compete on a truly global scale.”

Paper Excellence reports production of 2.8 million metric tons of pulp and paper through acquisitions of Brazil’s Eldorado Brazil Celulose and British Columbia’s Catalyst Paper in 2019, as well as the Domtar acquisition last year.

According to Resolute, it adds to the Paper Excellence portfolio 1.1 million metric tons of pulp capacity, 116,000 metric tons of tissue capacity, seven paper mills totaling 1.5 million metric tons of capacity and 22 wood products facilities

Domtar continues to move on its Kingsport, Tennessee, conversion project as well, announcing last month it is on track and expected to be complete by the end of this year. The company’s first 100-percent-recycled packaging facility will produce approximately 600,000 tons per year of recycled-content containerboard and will consume 660,000 tons per year of old corrugated containers and mixed paper.

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