Verso Paper Corp. announced on Monday the intent to purchase NewPage Holdings Inc. for $1.4 billion.
Verso, a company that produces coated papers, expects the acquisition of printing and specialty paper maker NewPage to conclude in the second half of 2014.
"The combination of Verso and NewPage will create a stronger business that is better positioned to serve our customers and compete in a competitive global marketplace," said David J. Paterson, Verso's President and Chief Executive Officer. "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."
Once the sale is complete, Verso expects to boast sales of roughly $4.5 billion with 11 manufacturing facilities in six states. NewPage officials believe that this will be the best move for their stakeholders, and that combining with Verso will allow the companies to achieve greater efficiencies.
The two paper companies attempted to merge back in September of 2012, but those talks fell through after Verso called off discussions. Verso officials stated that the decision to not go forward with the merger was in the best interest of their stockholders at that time.
Verso currently operates a mill in Quinnesec, while NewPage operates the Escanaba paper mill. NewPage declared bankruptcy in 2012, and cut 300 positions from the Escanaba mill last February to reduce personnel costs by five percent.
Both companies are putting together a team in charge of leading the integration efforts, but the acquisition will need regulatory approval to conclude.