Karta Halten B.V entered into a definitive agreement to acquire Domtar Corporation (NYSE:UFS) for $2.9 billion on May 10, 2021. Under the terms of agreement, Karta Halten B.V will pay $55.5 per share to acquire all the issued and outstanding shares of Domtar. Karta Halten B.V intends to continue the operations of Domtar as a stand-alone business entity. At the same time, Paper Excellence will be arranging financing to execute the transaction, and has commitment of an aggregate of $1.95 billion of financing consisting of a five-year senior secured asset-based revolving facility in the aggregate principal amount of $400 million; a seven-year senior secured term loan facility in an aggregate principal amount of $775 million; and a seven-year senior secured bridge facility in an aggregate principal amount of $775 million. As of September 28, 2021, launched Private Offering of Senior Secured Notes Due 2028 for $750 million which is used to pay the cash consideration in connection with the Merger. The net proceeds from the Offering of 6.750% senior secured notes due 2028 will be used, together with an equity investment, borrowings under new senior secured credit facilities and, following the consummation of the Merger, cash on Domtar's balance sheet, to (i) pay the cash consideration in connection with the merger, (ii) repurchase Domtar's 6.25% Senior Notes due 2042 and 6.75% Senior Notes due 2044 (the “Existing Domtar Notes”), if any, tendered for redemption in the change of control offers for the Existing Domtar Notes to be conducted by Domtar following the closing of the merger), (iii) pay fees, costs and expenses in connection with the merger and related transactions and (iv) fund cash to the balance sheet. As such, Domtar will continue to be led by its management team and Karta Halten B.V plans to retain its corporate and production locations. Domtar would be obligated to pay a termination fee of $82.7 million (representing approximately 2.9% of the aggregate merger consideration) and is entitled to receive a reverse termination fee of $171.1 million (approximately 6% of the aggregate merger consideration).

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.