January 30

Billion-dollar merger may affect three Maine paper mills

Verso Paper will acquire NewPage Holdings in a $1.4 billion deal. The two employ 2,250 workers in the state.

By Jessica Hall jhall@pressherald.com
Staff Writer

(Continued from page 1)

click image to enlarge

A proposed Verso-NewPage merger would include 11 mills in six states, including Verso Paper’s Bucksport Mill, shown here.

Press Herald file photo

Rice said he doesn’t expect the consolidation of Verso Paper and NewPage Holdings to affect the price of paper. Rather, the biggest change for the two companies will likely involve shifting production among plants to make sure each machine is operating at capacity.

“This is a good deal for Verso,” Rice said. “By purchasing a direct competitor, they will be able to monitor and control their production more precisely. They can have a machine or plant specialize and operate at full capacity.”

Based on volume, Maine produces more paper than any state other than Wisconsin, according to the Maine Pulp & Paper Association. About 7,400 people in Maine were employed in pulp and paper manufacturing in 2010, the most recent year for which figures are available.

In a prepared statement, Verso Paper CEO Dave Paterson said, “We continue to face increased competition from electronic substitution for print and international producers, but as a larger, more-efficient organization with a sustainable capital structure, we will be better positioned to compete effectively and deliver solid results despite the industry’s continuing challenges.”

Paterson will lead the combined organization. At closing, a current director of NewPage Holdings will join the board of Verso Paper.

Shares of Verso Paper surged in Monday’s trading, gaining $2.56 per share, nearly 400 percent, to close at $3.21 on the New York Stock Exchange.

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