Domtar Buys Xerox-Branded Paper Businesses

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Canada's Domtar (NYSE: UFS  ) has agreed to buy the U.S. and Canadian paper operations of Norwalk, Conn.-based Xerox (NYSE: XRX  ) , the companies announced Friday.

Xerox doesn't actually manufacture paper, but it does distribute "coated and uncoated papers and specialty print media including business forms" under its own brand name. Domtar, one of the largest paper manufacturers and distributors in North America, will be buying this business and incorporating it into its own pulp and paper business -- the company's largest segment, doing $4.6 billion in revenues annually. The companies also disclosed that Xerox will be signing a trademark licensing agreement with Domtar, entitling it to sell paper under the valuable Xerox brand name.

The companies said they expect this deal to close in Q2 2013. Financial terms of the transaction weren't disclosed -- neither the businesses' purchase price nor what, if any, licensing fee will be paid for the trademark. Regardless, shares of both companies appeared to benefit from the news, rising in Friday trading -- 0.6% for Xerox, and 0.5% for Domtar -- to close at $8.60 and $77.88, respectively.

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9/23/2016 4:05 PM
UFS $36.97 Down -0.53 -1.41%
Domtar CAPS Rating: *****
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Xerox CAPS Rating: ****