Karta Halten B.V completed the acquisition of Domtar Corporation.
The transaction is subject to Domtar shareholder approval, receipt of the required regulatory approvals and other customary closing conditions. The agreement has been unanimously approved by the Domtar Board of Directors. As of July 29, 2021, Stockholders of Domtar Corporation approved the transaction. Additionally, Domtar announced that clearances have been obtained under the antitrust laws of Spain and the People's Republic of China, following previous clearances obtained in the United States and Turkey, representing another step toward the closing of the announced Merger. On November 18, 2021, PaperExcellence B.V. and Domtar Corporation jointly announced that they have received Canadian Competition Act approval for the transaction. The Domtar Board of Directors unanimously recommend shareholders to adopt the merger agreement. The transaction must be cleared by competition authorities in several countries where both Domtar and Paper Excellence companies do business. The aim of these regulatory reviews is to ensure that the proposed merger does not harm competition. The special meeting of stockholders of Domtar Corporation to approve the transaction will be held on July 29, 2021. As of July 29, 2021, the transaction is subject to receiving clearance under Canada's Competition Act and other customary closing conditions. As of October 4, 2021, Domtar completed the financing of $775.0 million aggregate principal amount of 6.750% senior secured notes due 2028. The transaction is expected to close in the second half of 2021. The Merger is expected to be completed before the end of 2021.
Barclays PLC (LSE:BARC) is serving as exclusive financial advisor to Paper Excellence and Karta Halten B.V. Robert Katz and Jason MORELLI of Latham & Watkins, LLP acted as lead legal advisors, McMillan, LLP, Miller Titerle LLP, and Mehigan LLP acted as legal advisors to Paper Excellence and Karta Halten B.V. Morgan Stanley & Co. LLC, is serving as exclusive financial advisor and fairness opinion provider to Domtar and Paul Bird, William Regner, Molly Stockley, Steven Slutzky, Jeffrey Ross, Katarina Molnarova, Jonathan Lewis, Gary Friedman, Ted Hassi, Timothy McIver, Kyra Bromley, Erica Weisgerber, Henry Lebowitz and Stuart Hammer of Debevoise & Plimpton LLP and Osler, Hoskin & Harcourt, LLP are serving as legal advisors to Domtar. Georgeson LLC acted as proxy solicitor to Domtar and is entitled to receive a fee of approximately $35,000. Domtar agreed to pay Morgan Stanley & Co. LLC a fee, a significant portion of which is contingent upon the closing of the merger, of approximately $33.7 million. As compensation for Morgan Stanley rendering a financial opinion to the Board, Domtar paid Morgan Stanley a fee equal to $11.1 million, which will be credited against the Morgan Stanley transaction fee payable if the merger is consummated.
Karta Halten B.V completed the acquisition of Domtar Corporation (NYSE:UFS) on November 30, 2021. At effective time of merger, on the terms and subject to conditions in agreement, each share of common stock of Domtar outstanding immediately prior to Effective Time was converted automatically into the right to receive $55.50 in cash, without interest. Domtar continuing as the surviving corporation and as a subsidiary of Karta. Each option to purchase Common Stock that was outstanding immediately before Effective Time, whether vested or unvested, was canceled and converted into right to receive a cash payment equal to product of (i) total number of shares of Common Stock underlying such Domtar Stock Option multiplied by (ii) the excess, if any, of Consideration over exercise price per share of such Domtar Stock Option, without any interest and subject to all applicable withholding. Any Domtar Stock Option that had an exercise price per share that was greater than or equal to Consideration was cancelled for no consideration or payment. Each award of Domtar restricted stock units that was outstanding immediately prior to Effective Time, whether vested or unvested, other than a Domtar RSU granted during year of closing, was cancelled and converted into right to receive a cash payment from Surviving Company equal to product of (i) the total number of shares of Common Stock underlying such Domtar RSU multiplied by (ii) Consideration, without any interest and subject to all applicable withholding. Each award of Domtar performance stock units that was outstanding immediately prior to Effective Time, whether or not vested, other than a Domtar PSU granted during year of closing, immediately vested and was cancelled and converted into right to receive a cash payment from Surviving Company equal to product of (i) total number of shares of Common Stock underlying such Domtar PSU multiplied by (ii) Consideration, without any interest and subject to all applicable withholding. The number of shares of Common Stock underlying such Domtar PSU was determined (1) based on actual level of performance achieved for applicable performance period for portion of such Domtar PSU with respect to which performance period had been completed as of closing, (2) based on actual level of performance achieved as of closing (taking into account Consideration) for portion of such Domtar PSU with respect to which performance period had commenced but was not completed as of closing; and (3) by assuming achievement of target level of performance for portion of such Domtar PSU with respect to which performance period had not yet commenced as of closing. Each CIC Year RSU and CIC Year PSU was canceled and converted into right to receive a cash payment from Surviving Company equal to product of (i) (x) total number of shares of Common Stock underlying each such CIC Year Award multiplied by (y) Consideration, without any interest and subject to all applicable withholding, multiplied by (ii) a fraction, numerator of which is the number of days elapsed from the first day of calendar year in which closing occurred through date of such closing, and denominator of which is 365. Number of shares of Common Stock underlying a CIC Year PSU was determined in same manner in which number of shares of Common Stock underlying a Domtar PSU was determined. Each outstanding award of Domtar deferred stock units that was outstanding as of immediately prior to Effective Time was cancelled and converted into right to receive a cash payment from Surviving Company equal to product of (i) total number of shares of Common Stock underlying such Domtar DSU multiplied by (ii) Consideration, without any interest and subject to all applicable withholding. Domtar will operate as a stand-alone business entity within 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.