Undated Photo of the pulp and paper mill owned by Resolute Forest Products in Thunder Bay
Canada’s Competition Bureau has entered into a consent agreement with Domtar to address competition concerns over its acquisition of Resolute Forest Products.
A review has concluded the proposed transaction would substantially lessen competition in the supply of northern bleached softwood kraft in Eastern and Central Canada and the purchase of wood fibre here in the Northwest. It would result in market shares well above the 35% threshold established in the Bureau’s Merger Enforcement Guidelines.
The Bureau says there are obstacles that exist to new entries into the market and expansions for an existing mill.
“the proposed transaction would likely provide Domtar with monopsony power in northwestern Ontario and enable Domtar to pay lower than competitive prices to suppliers of wood fibre”
To resolve those concerns Domtar has agreed, post transaction, to sell Dryden’s pulp mill and Thunder Bay’s Pulp and Paper mill to two independent purchasers approved by the Commissioner of Competition.
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