Domtar shareholders overwhelmingly approve takeover by B.C.'s Paper Excellence

Photo: The Canadian Press

Domtar president and CEO John Williams gets ready for the paper company's annual meeting in Montreal, Wednesday, April 30, 2014. THE CANADIAN PRESS/Paul Chiasson

Domtar Corp. shareholders have overwhelmingly approved a takeover of the paper producer by B.C.-based Paper Excellence.

More than 81 per cent of outstanding shares were voted in favour of the merger at a special meeting.

Karta Halten B.V., an affiliate of Paper Excellence, will acquire Domtar shares for US$55.50 per share in cash as presented in an agreement dated May 10 that implies an enterprise value of about US$3 billion.

Domtar says it has received clearances under the antitrust laws of Spain and China, following previous clearances from the United States and Turkey.

The merger is expected to be completed before the end of the year, subject to approval under Canada’s Competition Act and other customary closing conditions.

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.

Montreal and South Carolina-based Domtar is an integrated manufacturer and marketer of uncoated freesheet paper in North America and one of the largest manufacturers of pulp in the world. It has 13 pulp and paper mills and 10 manufacturing and converting facilities in Canada and the United States.