Domtar, Paper Excellence complete acquisition of Resolute Forest Products

The Paper Excellence Group, through its subsidiary Domtar Corp., has completed its previously announced $2.7 billion acquisition of Resolute Forest Products Inc.

The closure comes days after Fort Mill, South Carolina-based Domtar agreed to sell its Dryden pulp mill in Ontario for $240 million to First Quality Enterprises Inc., a paper and packaging manufacturer based in Great Neck, New York.

"We are well-positioned with the addition of competitive lumber capacity at a time of significant shortage of housing stock throughout North America," Paper Excellence Chief Strategy Officer Patrick Loulou says. "Resolute has show that it shares our values and high standards related to the environment, our communities and our people."

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Paper Excellence produces approximately 2.5 million metric tons of pulp and paper annually. 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.

"Together we are creating a stronger player in the global marketplace," Resolute President and CEO Remi G. Lalonde says. "We look forward to collaborating with our new colleagues, generating long-term value and driving sustainable economic activity in the communities where we operate."

The sale of the Dryden facility was a requirement under the consent agreement between Domtar and the Canadian Competition Bureau in connection with its review of the Resolute acquisition. In October 2022, Resolute and Paper Excellence announced their intention to sell Resolute’s Thunder Bay pulp and paper mill to help accelerate the acquisition as well.

Previously, the Canadian Competition Bureau raised concerns that the acquisition would create too much concentration in northern bleached softwood kraft production in eastern and central Canada. The sale of the Thunder Bay and Dryden facilities, the bureau said, is sufficient to address its concerns of a potential monopsony.

According to reports, there still is no word on any potential buyers for the Thunder Bay site.

The Dryden mill has one fiber line and produces 327,000 air-dried metric tons of northern bleached softwood kraft pulp annually. According to Domtar, the facility is the largest employer in Dryden, Ontario, and it says First Quality has made clear its commitment to the mill, its employees and the surrounding community.