Pulp and paper producer Domtar has acknowledged it is in talks with B.C.-based Paper Excellence about a possible merger or sale of the company.

Domtar, which also owns a pulp mill in Kamloops, said in a statement that the discussions may or may not result in an agreement.

“In response to that speculation, Domtar acknowledges that its management has been in discussions with Paper Excellence about such a potential transaction,” the statement said. “Domtar does not intend to make further comment unless or until there is a transaction to announce.”

Richmond, B.C.-based Paper Excellence is a privately held company with $2.4 billion in annual sales from the production of more than 2.8 million tons of paper at seven manufacturing facilities in Canada. It has 2,800 employees.

The South Carolina and Montreal based Domtar meanwhile is one of North America’s largest makers of uncoated freesheet or copier paper and one of the world’s largest manufacturers of pulp. It has about 6,600 employees in 50 countries and annual sales of about US$3.7 billion.

Domtar has 13 pulp and paper mills and 10 manufacturing converting facilities with annual capacity to make about 2.7 million tons of paper and 1.5 million air-dried tons of market pulp.

Its Kamloops mill is the tenth largest employer in the city, according to a company factsheet, with about 350 local jobs, and an estimated economic impact of US$ 650-million.

– With files from The Canadian Press