RUMFORD – Verso Paper Corp. announced Wednesday that it reached a settlement with the U.S. Department of Justice, allowing it to move forward with its acquisition of NewPage Holdings Inc. for approximately $1.4 billion.
The merger, originally announced on Jan. 6, 2014, had been held up due to an antitrust review by the U.S. Department of Justice.
Verso said in a news release Wednesday that, as part of the settlement process, NewPage would need to sell its paper mills in Rumford and in Biron, Wis.
Catalyst Paper Holdings, based in British Columbia, announced on Oct. 31, 2014, that its was planning to purchase the Rumford and Biron mills for $74 million in cash after Verso’s merger with NewPage went through.
According to a fact sheet on Catalyst’s website, it is Western North America’s largest producer of mechanical printing papers.
The merger between Verso and NewPage is anticipated to be complete in early January 2015.
Verso said that after the merger, they will have “approximately $3.5 billion in annual sales and approximately 5,800 employees in eight mills across six states.”
The company said the Jay mill operated by Verso is not expected to shut down as a result of the merger.
“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,” David J. Paterson, Verso’s president and chief executive officer, said. “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.”
Mark Angelson, chairman of NewPage, said, “Although this transaction has been among the most challenging and complex, the resulting combination will create value for all of our constituents, particularly our shareholders.”
“We would not have come this far without critical input from the Justice Department and the advisers, key shareholders and directors of both companies,” Angelson said.
Verso said that following the completion of the NewPage acquisition, its existing senior leadership team will continue to lead the combined company.
United Steelworkers Local 900 President Ron Hemingway said the news left him feeling “very optimistic.”
“The sale of the Rumford mill to Catalyst Paper Holdings was hinging on whether the merger between Verso and NewPage went through,” Hemingway said. “It’s sort of like a baseball trade between three teams: two of the three teams don’t get anything unless the third team agrees to make the trade too.”
“I’m very optimistic about what this means for the sale to Catalyst,” Hemingway said. “If the Rumford Mill is sold to Catalyst, it would make us the biggest coated paper mill for them. As a result, we would get the better paper orders and become more profitable.”
Rumford mill spokesman Tony Lyons could not be reached for comment late Wednesday afternoon.