December Paper Market Upate

Paper Excellence Shuts Catalyst Powell River Mill
Paper Excellence announced the indefinite end of operations at its Catalyst Paper Tis'kwat mill in Powell River, British Columbia. Paper Excellence will continue to supply paper customers with production from its other paper mills in Crofton and Port Alberni. The Powell River mill has an annual capacity of approximately 180,000 tons per year and produced primarily Uncoated Mechanical and Kraft papers.

Paper Supply Shocks Continue to Mount
New paper supply shocks continue to mount on top of the numerous conversions and closures already in place. In uncoated freesheet, a fatal accident at Domtar’s Windsor mill put 600,000 tons of annual capacity offline for much of November, with only one machine back up and running until the fiber line restarts. In coated mechanical, in addition to the announced exit of Evergreen Pactiv’s Pine Bluff mill in October, Paper Excellence warned of potential delivery interruptions and system-wide downtime, including at least a two-week curtailment of the Crofton mill, in November due to a variety of supply chain disruptions. For all grades, the numerous general problems in the supply chains and transportation networks remain an impediment. (RISI)

R.R. Donnelly Determines that Chatham’s Acquisition Offer is a “Superior Proposal” to its Existing Merger Agreement with Atlas Holdings
R.R. Donnelley & Sons Company (“RRD”) announced that its Board of Directors has determined that an unsolicited proposal from Chatham Asset Management to acquire all of the common stock of the Company not already owned by Chatham for $10.25 per share in cash constitutes a “Superior Proposal” to the existing merger agreement with Atlas Holdings, dated November 3, 2021. Under the terms of the Atlas Merger Agreement, Atlas has agreed to acquire the Company for $8.52 per share in cash.

RRD has notified Atlas of the Board’s intention to terminate the Atlas Merger Agreement for the purpose of entering into a merger agreement with Chatham.  Atlas has until December 7, 2021 to negotiate an amendment of the Atlas Merger Agreement such that the Chatham Proposal would no longer constitute a Superior Proposal. RRD is not permitted to terminate the Atlas Merger Agreement or enter into a definitive merger agreement with Chatham during the Negotiation Period. Under the Atlas Merger Agreement, RRD is required to pay a $20 million termination fee and expense reimbursement to Atlas if the Company terminates the Atlas Agreement in order to enter into a merger agreement with Chatham.

Paper Excellence Closes its Previously Announced Acquisition of Domtar
The Paper Excellence Group, a global diversified manufacturer of pulp and specialty, printing, writing, and packaging papers, announced the successful closing of its previously-announced acquisition of Domtar (NYSE: UFS). Domtar will operate as a stand-alone business entity within the Paper Excellence Group, with Domtar’s current CEO and management team remaining in place. There are no further changes to operating locations, business plans, or Domtar’s employee base at this time.

Demand and Operating Rate Forecasts (RISI)

U.S. Economy and Paper End-Use Indicators

 

N.A. Coated Paper Operating Rates

N.A. P&W Paper Producer Inventories

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