Verso Paper's US$1.4B acquisition of NewPage approved by Wisconsin Public Service Commission, which grants combined companies exemption from certain provisions of state's holding company statute
April 7, 2014
(Industry Intelligence Inc.)
– The proposed merger of Verso Paper Corp. and NewPage Corp. cleared a regulatory hurdle when the Wisconsin Public Service Commission (PSC) recently gave its approval, reported The Post-Crescent on April 6.
The PSC granted an exemption to the combined companies from certain provisions of the state’s holding company statute, which among other things does not allow a single person to own more than 10% of a public utility’s voting stock.
Investment fund Apollo Global Management LLC owns 68% of Verso Paper’s outstanding shares, according to the PSC’s order, which was issued on April 3, The Post-Crescent reported.
The PSC gave its approval for the exemption after deciding that the transaction would be “in the best interests of utility customers, investors and the public.”
The merger of Verso Paper and NewPage will create “a larger, more efficient and financially stronger North American printing and specialty paper manufacturer,” the companies stated, reported The Post-Crescent.
The companies expect to retain “sizable operations and a substantial number of employees in Wisconsin,” according to the statement. Verso Paper has three paper mills in Maine and Michigan and employs about 2,100 people.
NewPage and Memphis, Tennessee-based Verso Paper stated that the US$1.4 billion merger would not affect PSC’s regulation of Verso Paper and the holding company system NewPage would join, reported The Post-Crescent.
When Miamisburg, Ohio-based NewPage acquired Stora Enso North America in 2007, the PSC granted the exemption. Prior to this, Stora Enso Oyj had bought Consolidated Papers Inc. of Wisconsin Rapids.
In their application for the exemption, Verso Paper and NewPage also said that the merger would not affect direct ownership of operations formerly owned by Consolidated Papers, The Post-Crescent reported.
The primary source of this article is The Post-Crescent, Appleton, Wisconsin, on April 6, 2014. Click here for full version of primary source’s original article.