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Mercer to acquire Daishowa-Marubeni International for $359.2M.

Mercer International announced that it has entered into an agreement with Marubeni Corporation, Nippon Paper Industries Co., Ltd., and Daishowa North America Corporation to acquire all of the issued and outstanding shares of DMI for consideration of $359.2 million, which includes minimum working capital of $85.7 million. DMI owns 100% of a bleached kraft pulp mill in Peace River, Alberta and has a 50% interest in the Cariboo Pulp and Paper Company, or CPP, a joint venture which operates a bleached kraft pulp mill in Quesnel, British Columbia. As a result of this transaction, Mercer's annual production capacity for pulp will increase by approximately 41% to 2.2 million ADMTs, and surplus energy will increase by approximately 8% to 890,000 MWhs. Further, the acquisition of DMI will add NBHK pulp to Mercer's current product mix as well as provide the Company with an expanded market presence in Asia. DMI also holds 20-year term renewable governmental Forest Management Agreements and Deciduous Timber Allocations in Alberta with an Annual Allowable Cut, or AAC, of approximately 2.4 million cubic meters of hardwood and 400,000 cubic meters of softwood. The transaction is subject to customary closing conditions, including receipt of requisite regulatory anti-trust approvals. In connection therewith, Mercer has arranged a fully committed financing in the amount of $350 million to finance the acquisition. The transaction is expected to close in the fourth quarter of 2018.

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Publication:The Fly
Geographic Code:1CALB
Date:Oct 4, 2018
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