PORTLAND, Maine — NewPage has agreed to sell its mill in Rumford and another in Wisconsin to satisfy antitrust concerns about its merger with Verso Paper.
Catalyst Paper Corp., based in Canada, announced the $74 million purchase agreement Thursday for the Rumford mill and NewPage’s mill in Biron, Wisconsin.
The deal is contingent on Verso Paper buying NewPage, which industry analysts have projected could mean mill closures or that the company would shed some assets, improving its overall financial position.
Verso announced early this month it will close its Bucksport mill in December.
Verso said in a corporate filing the sale agreement was “in order to address potential antitrust considerations” related to its proposed $1.4 billion acquisition of NewPage. That deal, which would have created a company controlling about half the coated paper market in North America, is now under antitrust review by the U.S. Department of Justice.
If the sale is completed, it would mark the first move into the United States for Catalyst, which manufactures specialty printing papers, newsprint and pulp at three mills in British Columbia.
“With this transaction, Catalyst will be better able to serve new and existing customers through operational synergies and a more diversified and higher value suite of products,” Joe Nemeth, Catalyst’s president and CEO, said in a prepared statement.
Verso leaders have said spreading out overhead costs and sharing efficiencies also has driven its bid for NewPage.
Catalyst said through the deal it expects to spread overhead costs across a larger production base and access new markets, something Ron Hemingway, president of the Local 900 United Steelworkers Union, said he hoped for with the merger announcement early this year.
The Wisconsin mill produces lightweight coated and ultra-lightweight coated paper. NewPage’s Rumford mill produces coated specialty, coated freesheet and coated groundwood paper and capacity for hardwood and softwood pulp.
The Rumford mill employed about 700 people as of February, after a round of layoffs the company blamed on the falling demand for coated paper.