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S&P puts Resolute on positive watch
S&P said it placed its Resolute Forest Products Inc. ratings, including the B- unsecured notes’ rating, on CreditWatch with positive implications.
The placement follows the Paper Excellence Group reporting it plans to buy Resolute through its wholly owned subsidiary Domtar Corp. in an all-cash deal for $20.50 per share or an enterprise value of about $2.7 billion, including pension liabilities. The deal is expected to close in the first half of 2023.
“We believe the combined entity will have a stronger credit profile than Resolute on a stand-alone basis. Domtar is the leading integrated uncoated free sheet producer in North America, with low-cost assets that have mitigated the effect of the structural decline in paper demand. In our view, the acquisition will increase the scale and diversification of its production and cash flows, primarily from the integration of Resolute's lumber business,” S&P said in a press release.
The agency said it aims to resolve the positive watch following the deal’s close.
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