Abitibi, Bowater clear final government hurdle in plan to combine

By Lisa Kerner

Charlotte, N.C., Oct. 23 - Abitibi-Consolidated Inc. and Bowater Inc. reached an agreement with the U.S. Department of Justice clearing the way for the two companies to complete their proposed combination.

Under the agreement, the companies agreed to divest Abitibi-Consolidated's newsprint mill in Snowflake, Ariz.

With all necessary regulatory and shareholder approvals now received, the transaction is slated to close by the end of October, according to a company news release.

The combined company, AbitibiBowater Inc., will produce a wide range of newsprint and commercial printing papers, market pulp and wood products. AbitibiBowater will own or operate 31 pulp and paper facilities and 35 wood product facilities located in the United States, Canada, the United Kingdom and South Korea.

As previously reported, under the Jan. 29, 2007 merger agreement, each common share of Abitibi-Consolidated will be exchanged for 0.06261 of a common share of the combined company. Each Bowater common share will be exchanged for 0.52 of a common share of AbitibiBowater.

Based in Montreal, Abitibi-Consolidated provides newsprint, commercial printing papers and wood products. Bowater produces coated and specialty papers and newsprint in Greenville, S.C.

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