Mercer International Inc. Announces Agreement for the Acquisition of the Celgar NBSK Pulp Mill for $210 Million

Mercer International Inc. Announces Agreement for the Acquisition
of the Celgar NBSK Pulp Mill for $210 Million 


NEW YORK, Nov. 23  /PRNewswire-FirstCall/ -- Mercer International Inc.
("Mercer" or the "Company") (NASDAQ:MERCSNASDAQ:TSX:NASDAQ:MRI.U) today
announced it has entered into a definitive agreement to acquire the Celgar pulp
mill.  The Celgar mill is a modern producer of NBSK pulp with an annual
production capacity of approximately 430,000 tonnes located at Castlegar,
British Columbia, Canada.  The purchase price for the mill, excluding an amount
for defined working capital on closing, is $210 million, of which $170 million
is payable in cash and $40 million is payable in shares of Mercer.  The
acquisition is subject to a number of conditions customary for transactions of
this type, including receipt of certain regulatory approvals and Mercer
effecting satisfactory financial arrangements to complete the transaction.  On
a combined basis, the acquisition will position Mercer as the largest publicly
traded market producer of NBSK pulp in the world with an annual NBSK pulp
production capacity of approximately 1.3 million tonnes.

Jimmy Lee, Mercer's President and Chief Executive Officer stated:  "This
transaction clearly fits within our strategy of focusing on world class
production assets that produce high quality NBSK pulp.  Celgar is one of the
few large, modern and efficient NBSK mills that can match our existing
operations in terms of capacity and technical age and we are very pleased to be
able to secure the mill at well below the replacement cost of comparable
facilities.  The transaction will be a major expansion of our pulp business
where we feel we can generate strong value through active management.  The
Celgar mill's operations are highly complementary to our existing European
facilities and will permit us to coordinate our pulp sales on a global basis to
better serve our larger customers."  He added:  "The Celgar mill has been
operating under receivership for several years and we believe as the new owner
there are a number of areas where we can improve financial operating
performance and increase NBSK pulp production."

Mr. Lee concluded:  "Our seasoned management team has successfully completed
significant expansions, construction and start-ups of pulp mills and has
successfully optimized their performance.  We are confident that we can make
this acquisition successful for all of our stakeholders."

David Gandossi, Mercer's Chief Financial Officer, stated:  "The Celgar mill
represents an outstanding opportunity for our stakeholders, given that we
expect the transaction to be accretive to earnings and cash flow. Furthermore,
the acquisition will diversify our cost base away from Euros and enhance our
position as a leading player in the NBSK pulp segment."

Terms of the Transaction

Under the terms of the agreement, Mercer will pay total consideration of $210
million for the Celgar pulp mill, of which $170 million is payable in cash and
$40 million is payable in shares of Mercer.  The price per Mercer share will be
equal to the weighted average trading price for Mercer shares for a 20 day
period preceding closing, subject to a maximum price of $9.50 and a minimum
price of $7.75 per share.  The shares of Mercer to be issued as partial payment
of the purchase price have not been registered under the United States
Securities Act of 1933 and may not be offered or sold in the United States
absent registration or an applicable exemption from the registration
requirements.  Additionally, Mercer will acquire certain defined net working
capital of the Celgar mill on closing.

The transaction, to be accounted for as an asset purchase, is expected to close
in early 2005.  The transaction requires certain regulatory approvals including
the expiration or earlier termination of the applicable waiting periods under
the Competition Act (Canada) and the Hart-Scott-Rodino Antitrust Improvements
Act and a determination that the transaction is of net benefit to Canada under
the Investment Canada Act.

The acquisition is also subject to Mercer securing satisfactory financing and
closing occurring on or before February 28, 2005 with an extension available
under certain circumstances.  Mercer intends to raise the required capital for
the transaction by way of both equity and debt capital. Additional information
with respect to the proposed financing for the transaction will be made
available in December.  Mercer also intends to establish a new working capital
revolving debt facility for the Celgar pulp mill.

Celgar NBSK Mill

The Celgar mill underwent a CDN$850 million rebuild and modernization program
in 1993.  As a result, the mill is a high quality, continuous process NBSK pulp
mill with a current annual production capacity of approximately 430,000 tonnes
with modern power generation and environmental treatment facilities.  The mill
has diverse fiber supply arrangements with numerous regional sawmills as well
as a dedicated workforce that benefits from a five year collective bargaining
agreement.  As a result of cost overruns and indebtedness incurred in
connection with the modernization program, the Celgar mill's then shareholders
assigned it into bankruptcy in 1998.  Subsequently, the Celgar mill's two
senior secured lenders appointed a receiver for the mill's assets.  KPMG Inc.
has operated the Celgar mill as a receiver and trustee since 1998.  Mercer
believes that the Celgar mill represents operations with similar underlying
profit potential and low maintenance capital requirements as its Rosenthal mill
and recently completed Stendal mill in Germany.

Mercer

Mercer is a European pulp and paper manufacturing company.  Mercer currently
operates two modern NBSK pulp mills in Germany with an aggregate annual
production capacity of approximately 862,000 tonnes.  To obtain further
information on the Company, please visit its web site at
http://www.mercerinternational.com/.

In conjunction with this release, Mercer International will host a conference
call, which will be simultaneously broadcast live over the Internet. 
Management will host the call, which is scheduled for Wednesday, November 24,
2004 at 10:00 AM (EST).  Listeners can access the conference call live and
archived over the Internet through a link at the Company's web site at
http://www.mercerinternational.com/ or at
http://phx.corporate-ir.net/playerlink.zhtml?c=62074&s=wm&e=975087.  Please
allow 15 minutes prior to the call to visit the site and download and install
any necessary audio software.  A replay of this call will be available
approximately two hours after the live call ends until December 1, 2004 at
11:59 P.M. (EST).  The replay number is [phone], and the passcode is
2456112.

This release does not constitute an offer of any equity or debt securities for
sale.  Any securities that may be offered in an unregistered offering will not
be registered under the Securities Act of 1993 and may not be offered or sold
in the United States absent registration or an applicable exemption from
registration requirements.

The preceding includes forward looking statements which involve known and
unknown risks and uncertainties which may cause the Company's actual results in
future periods to differ materially from forecasted results. Among those
factors which could cause actual results to differ materially are the
following: market conditions, competition, construction and equipment
performance risks and other risk factors listed from time to time in the
Company's SEC reports. 

DATASOURCE: Mercer International Inc.



CONTACT:  Jimmy S.H. Lee, Chairman & President, [phone]; or David

M. Gandossi, Executive Vice-President & Chief Financial Officer,

[phone], both of of Mercer International Inc.; or Investors: Eric

Boyriven or Media: Scot Hoffman, both of Financial Dynamics, [phone]



Web site:  http://www.mercerinternational.com/ 

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