PORTLAND — Verso Paper Corp. reached a settlement with federal antitrust regulators to buy its larger competitor NewPage for about $1.4 billion, putting a long-sought deal to restructure both coated paper companies near completion.
Verso announced the breakthrough for the deal Wednesday morning, stating that the two paper makers reached a settlement that needs approval from the U.S. District Court of the District of Columbia and requires NewPage to sell off its mills in Rumford and Biron, Wisconsin.
In its assessment of the deal’s impact on industry competition, the U.S. Department of Justice affirmed statements by Verso officials that the closure of its mill in Bucksport did not have any connection to the merger.
“Verso contemplated closing the mill before it decided to merge with NewPage,” the statement indicated. “The United States does not allege that the closing of the Bucksport mill is a result of the merger.”
Verso announced its plan to merge with NewPage in January 2014.
The sale of two of NewPage’s mills announced earlier this year to Canadian papermaker Catalyst Paper Corp., however, were pursued in order to advance the merger.
Verso said it plans to close its purchase of NewPage in January 2015. It must sell the Rumford and Wisconsin mills before then. The combined company would continue to operate Verso’s mill in Jay and would have about 5,800 employees across eight mills in six states.
With the settlement, the Department of Justice’s Antitrust Division also disclosed the complaint that was resolved by that settlement agreement. The complaint laid out many of the objections federal regulators had to the deal without the required mill sales.
Without those divestitures, the DOJ found the company would have controlled more than 50 percent of the North American market for paper used primarily in magazines and catalogs and more than 70 percent of the market for paper used for adhesive labels.
Company officials have said the merger would result in savings from shared overhead and other efficiencies.
“The combination of Verso and NewPage will create a stronger, more stable company that will be better positioned to serve our customers and compete in a competitive global marketplace,” said David J. Paterson, Verso’s president and chief executive officer. “We are pleased that we were able to address the concerns of the Justice Department while preserving the benefits of the transaction for our stockholders and customers.”
Verso’s executives will continue to lead the combined company.