Coated paper maker Verso Paper Corp and New Page Holdings Inc have entered into a definitive agreement under which Verso will acquire New Page in a transaction valued at $1.4 bn. The deal is expected to save at least $175 million in pretax costs in the first 18 months after the closing, the companies said. No immediate plans to close any mills were announced.
New Page shareholders will receive a total cash and debt consideration of $900 million as well as a 20 to 25 per cent stake in Verso. Verso will also take on $500 million in New Page debt.
The combined company will have annual sales of about $4.5 bn and 11 manufacturing plants with a combined paper production capacity of 5 million tons.