Paper Excellence has signed a deal to buy Domtar Corp. in a deal with an enterprise value of about US$3 billion.
Under the agreement, the Richmond, B.C.-based company has agreed to pay US$55 per Domtar share in cash.
Paper Excellence, a global diversified manufacturer of pulp and specialty, printing, writing, and packaging papers, operates seven mills in Canada producing and shipping over 2.8 million tonnes of product annually with a workforce of more than 2,800.
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The companies say Paper Excellence intends to continue the operations of Domtar as a stand-alone entity.
They say Domtar will continue to be led by its management team and Paper Excellence plans to keep its corporate and production locations.
Shares in Domtar were up C$8.12 or 14 per cent at C$65.40 on the Toronto Stock Exchange.
“This agreement enables our shareholders to realize certain and immediate cash value at a significant premium for their shares,” Domtar CEO John Williams said in a statement.
“This transaction validates our long-term strategic plan for our leading paper and pulp businesses, and for our continued expansion into packaging.”