(Montreal) The shareholders of Resolute Forest Products have agreed to the acquisition offer of 2.7 billion Groupe Papier Excellence, Monday during a virtual meeting.
Posted at 10:36 a.m.
Updated at 11:19 a.m.
A majority of shareholders supported the transaction, according to a preliminary report. The support rate has not yet been revealed. The transaction is subject to regulatory approval.
The transaction would make Papier Excellence a major player in the Quebec forest industry. Resolute would become a subsidiary of the Domtar Group, which also became part of the British Columbia company last year.
When the transaction was announced, Resolute’s President and CEO, Rémi G. Lalonde, said that the acquisition of the Montreal company by Papier excellence was good news for Quebec.
He pointed out that the company would have access to more financial resources. He cited the Resolute newsprint mill in Gatineau as an example. The agreement provides for the completion of a feasibility study for the conversion of the plant to a packaging paper production plant.
“It’s a project of a few hundred million. As a public company that is not in the cardboard sector, it is more difficult to convince public investors to invest 200-300 million for a project like this,” indicated Mr. Lalonde.
At the end of October, however, Papier Excellence had been the subject of a critical report by the environmental association Greenpeace. The report alleges that the company has an opaque structure and is linked to companies criticized for their poor environmental practices. Paper Excellence rejected the report’s findings.
After the deal was announced, Scotiabank analyst Benoit Laprade said he saw no significant regulatory hurdles to the deal. He pointed out that there was little geographic overlap between Resolute and Excellence Paper. “If there are issues, they are likely to be local rather than large-scale. »
On October 27, the two companies announced their intention to sell a Resolute pulp and paper mill in Thunder Bay to “facilitate” the regulatory review process.
The stock gained 14 cents, or 0.49%, to $28.54 on the Toronto Stock Exchange in the morning.
Company named in this dispatch: Resolute Forest Products (TSX: RFP)