THUNDER BAY — British Columbia-based Paper Excellence Group has agreed to buy Montreal-based Resolute Forest Products.
Resolute has operations in Thunder Bay, Atikokan and Ignace.
The acquisition will be carried out through a merger of Resolute and and a newly-created subsidiary of Domtar Corp., which Paper Excellence took over last year.
Domtar operates a pulp mill in Dryden.
Paper Excellence vice-chair Patrick Loulou said in a statement that "Resolute complements our existing pulp, paper and packaging businesses, and adds capabilities in lumber and tissue."
It said it plans to retain Resolute's production locations and jobs.
The deal is valued at about $2.7 billion, and is expected to close in the first half of 2023.
"With this transaction, Resolute will accelerate its growth as it gains access to more tools, capital and opportunities to pursue our ambitions with the combined resources of the Paper Excellence Group," said Resolute CEO Remi Lalonde.
"This is good for employees and the communities where Resolute operates because we will continue to grow in a manner consistent with our core values," he added.
Gary Bragnalo, area director for Unifor, said the news came as a surprise but he believes "it's very good for Thunder Bay."
Bragnalo said that from what he has read, the deal will open up opportunities for new investment in Northern Ontario and maintain employment levels.
But he's curious about what the new ownership's strategy might be in years to come.
"Our mill here, we have a power boiler, we also have the pulp, and then we've got our newsprint, right? As you know, newsprint is declining, and our newsprint is pretty efficient. It's a good plant. "
Bragnalo added that he doubts there will be any immediate changes, but he expects Paper Excellence will take a closer look at the Thunder Bay operations in a couple of years.
He noted that the company has already indicated it will study the feasibility of converting the Gatineau, Quebec newsprint mill to produce packaging paper.