Why Is Resolute Forest Products (RFP) Stock Up 65% Today?

  • Paper Excellence has agreed to buy Resolute Forest (RFP) for $20.50 per share of RFP stock, plus additional considerations.
  • Paper Excellence is located in Western Canada, while Resolute's headquarters are in Montreal.
  • Among the other names in the pulp and paper sector are Clearwater (CWAN), Neenah (NP), and Glatfelter Corporation (GLT).
RFP stock - Why Is Resolute Forest Products (RFP) Stock Up 65% Today?

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Paper Excellence, based in Western Canada, has agreed to buy Resolute Forest Products (NYSE:RFP), whose headquarters are in Montreal, for about $2.7 billion of cash or $20.50 per share of RFP stock. In early trading, RFP stock soared 64.5% to $20.54.

Additionally, the owners of RFP stock are supposed to receive “a share of future softwood lumber duty deposit refunds” that Resolute will receive for its transaction through June 30, 2022.

Both companies develop and market paper and pulp products.

About Resolute Forest Products and Domtar

Resolute creates market pulp, tissue, wood products and papers, and it markets those offerings in over 60 countries. The company explains that its “pulp can be found in many everyday products, including bath tissue, paper towels, packaging, specialty papers and absorbent products such as diapers.”

Another American pulp maker, Domtar, was acquired by Paper Excellence in November, and Resolute Forest is technically being absorbed by Domtar.

Based in South Carolina, Domtar says that it is “the largest integrated manufacturer and marketer of uncoated freesheet paper in North America, and one of the largest manufacturers of pulp in the world.” The company reports that, before the Resolute deal, it had 20 plants. The company touts their increasing environmentally friendly production processes and sustainability.

Other Companies in the Sector

Among the other names in the pulp and paper sector are Clearwater (NYSE:CWAN), which is based in Washington state, Georgia-based Neenah (NYSE:NP),  and Charlotte-based Glatfelter Corporation (NYSE:GLT).

InvestorPlace contributor Stavros Georgiadis ranked RFP stock, and other forest product stocks, as “hot as tech stocks” back in June.

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.


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