The Domtar pulp mill in Kamloops will have to be sold as part of the company’s merger with Richmond-based Paper Excellence.
In a statement on Thursday, South Carolina and Montreal based Domtar said its merger, which was announced earlier this year, was approved by the Competition Bureau of Canada.
“Karta Halten B.V., an affiliate of Paper Excellence, will acquire all of the issued and outstanding shares of Domtar common stock for US$ 55.50 per share in cash pursuant to an agreement and plan of merger dated May 10, 2021,” the statement said.
In an interview, Domtar Spokesperson Bonny Skene told NL News the mill will be put up for sale early in 2022, once the $3-billion merger is official, which is expected to happen at the end of 2021.
“The requirement of the Competition Bureau is that the Kamloops mill be sold to a third part other than Paper Excellence,” she said. “It has to do with ensuring that there is fairness in competition. This condition addresses the government’s concern around fibre supply in the Central Interior that the mill uses.”
“It has always been known that the transaction between Paper Excellence and Domtar had been subject to regulatory review in a number of jurisdictions. So it was no surprise that the regulators had to review this transaction.”
Skene says employees at the mill as well as the government and elected officials at the municipal, provincial, and federal level were told about the impending sale Thursday morning.
In May, Unifor Local 10B president Rene Pellerin told NL News that he expected everything will remain the same once the merger went through.
“I’ve been told from local management, that everything’s going to be the same. There’s no changes at this time. It’s business as usual. All our collective agreements and our relationship between Domtar and Local 10B will remain the same going forward, for the time being,” he said at the time.
At the time, Kamloops mayor Ken Christian also said he wanted to learn more about Paper Excellence and what its objectives are for the city.
“Certainly, Domtar had a number of initiatives underway, in terms of modernizing the mill and investments on the site. Also some development plans for the Domtar industrial lands. So I’m keen to continue those discussions with Paper Excellence,” Christian told NL News in May.
The pulp mill is a major employer in Kamloops with about 350 workers. It is also the largest taxpayer in the city, paying about $5 million in property taxes every year.
