Kamloops pulp mill must be sold to third party as part of Domtar/Paper Excellence merger

CANADA (From news reports) -- While the merger of Domtar and Paper Excellence has been approved by the Competition Bureau of Canada, part of the approval means the Kamloops pulp mill must be sold to a third party.

On May 11, 2021, Paper Excellence and Domtar, based on Montreal and Fort Mill, S.C., entered reached an agreement for Richmond-based Paper Excellence to purchase Domtar for $55.50 per share, a deal worth about $3 billion in United States currency.
The merger agreement had a provision that limited the obligation to divest assets to no greater than 410,000 dried metric tons of softwood kraft pulp. The Domtar pulp mill in kamloops has 408,000 tons of production and is the company's only kraft pulp mill in B.C. that is part of the deal.

The Competition Bureau of Canada has concluded that the merger would likely lessen competition substantially for the purchase of wood fibre -- a key input in the manufacture of pulp -- from the Thompson/Okanagan region.

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