A deal has been agreed that will see Chinese paper recycler Nine Dragons buy US firm The Target Company and its two paper mills.
Nine Dragons will pay $175 million (£131 million) for the business that operates two mills in Maine and Wisconsin.
The mill in Maine has an annual capacity of 550,000 metric tonnes producing coated one-side, coated freesheet and coated groundwood grades.
While the Wisconsin mill produces groundwood grades with an annual capacity of 340,000 tonnes.
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In a statement, Nine Dragons said: “The company is principally engaged in the manufacturing and sales of packaging paperboard, recycled printing and writing paper and high value specialty paper products.
“The acquisition is an upstream integration of the group’s current business and is an important step in executing the group’s global fibre sourcing and customer strategy. The acquisition is expected to generate synergies within the existing raw material sourcing and production processes of the group. The acquisition will also allow the group to diversify its manufacturing base and obtain access to high quality virgin fibre.
“The resulting business model is expected to provide the group with more secure
material supply and stable development for the group in the long term.”
Nine Dragons has 39 mills in China and a joint venture in Vietnam. This is the first time it will own mills outside of Asia.
In the UK, Nine Dragons is provided with fibre by ACN Europe.