The forest enterprise Resolute Forest Products will become part of the corporation
The news that the forest industry company Resolute Forest Products Inc. (RFP) will become part of the private pulp and paper giant Paper Excellence Group has become a driver of a sharp increase in RFP shares. At the auction on July 7, they rose by more than 60% on July 8, and the stock adjusted to $19.9.
According to the terms of the agreement, Resolute Forest Products shareholders will receive $20.5 in cash for each share of the company. Resolute Forest Products and Paper Excellence Group transaction is $2.7 billion. Resolute Forest Products stockholders will receive conditional rights to an expected refund of approximately $500 million in tax liens for softwood lumber in the second quarter.
The Paper Excellence Group intends to merge Resolute Forest Products with the newly created subsidiary of its packaging business Domtar. The merger will help to diversify the company’s activities further and implement its expansion plans. The private company Paper Excellence Group owns paper production enterprises in the Americas and Europe. Adding Resolute Forest Products will strengthen its manufacturing network in North America.
Given the rise of e-commerce, there seems to be a growing need for paper and cardboard for packaging. This company is one of the companies that is benefiting from this. So, the purchase of Resolute Forest Products fits well with Paper Excellence Group’s strategy since it adds to businesses that already make pulp, paper, packaging, lumber, and fabrics. If shareholders and government agencies agree, the merger will happen in the first half of 2023.
