Richmond-based Paper Excellence is a step closer to acquiring Catalyst Paper.
The company, controlled by Asian investors, has cleared the Canada’s Competition Bureau, which issued a “no-action” letter in response to the proposed acquisition.
“This acquisition demonstrates Paper Excellence’s continuing deep commitment to the province of British Columbia,” said chief executive Brian Baarda.
“Once finalized, this acquisition confirms Paper Excellence’s position as a key player within Canada’s forest industry and will benefit all of the stakeholders involved.”
Paper Excellence Canada has agreed to purchase all of Catalyst Paper's operations — paper mills in Port Alberni, Crofton and Powell River, a distribution centre in Surrey and company headquarters in Richmond.
A no-action letter confirms the bureau has reviewed the transaction and decided it will not challenge it before the Competition Tribunal under the merger provisions of the Competition Act.
However, the Act does provide the bureau a year, following completion of the transaction, to change its mind and bring an application challenging the transaction.
At this point though, according to the Competition Bureau, the “proposed transaction is not likely to result in a substantial lessening or prevention of competition in the procurement of wood fibre in coastal B.C.”
The deal was announced in October after the province and Catalyst worked for months to keep mill operations running, including provisions to protect the pensions of workers and retirees at Catalyst mills.
Baarda told the Times Colonist at the time the acquisition falls in line with Paper Excellence’s strategy. “We are always on the lookout for opportunities to grow our platform, both in B.C., Canada and ultimately in North America — this is part of our growth plan," he said.
Paper Excellence has promised it will be business as usual for the 1,500 Catalyst workers affected by the deal.
Baarda suggested the company may eventually invest to expand markets and take advantage of increased demand.
Paper Excellence, which was formed in 2008 as a pulp exporter and has since grown to be a large producer manufacturing about two million tonnes of pulp annually, has already invested heavily in existing assets in Mackenzie and Howe Sound.
Catalyst Paper manufactures 1.3 million tonnes of pulp and paper products annually.