Abitibi-Consolidated and Bowater Combination approved by U.S. Department of Justice; Companies Announce Date for Q3 Earnings Release |
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Abitibi-Consolidated, Inc.
1155 Rue Metcalfe, Suite 800-T
Montreal, QC, H3B5H2
USA
Press release date: October 23, 2007
MONTREAL, QC and GREENVILLE, SC, Oct. 23 -- Abitibi-Consolidated Inc. (NYSE:ABY)(NYSE:TSX:)(NYSE:A) and Bowater Incorporated (NYSE: BOW)(NYSE:TSX:)(NYSE:BWX) today announced that they have reached an agreement with the United States Department of Justice that will allow the completion of the proposed combination of the two companies. Under the terms of the agreement, which was signed and filed today in the U.S. Federal District Court in Washington, D.C., the companies have agreed to divest one newsprint mill, Abitibi-Consolidated's mill in Snowflake, Arizona. The Snowflake mill has an annual capacity of approximately 375,000 tonnes. Scotia Capital Inc. will be engaged as exclusive financial advisor for the sale of the Snowflake mill and related assets, and all inquiries or expression of interest should be forwarded directly to their attention.
The proposed combination has now received all necessary regulatory approvals, including those from the Canadian Competition Bureau, the Federal Minister of Industry under the Investment Canada Act, the Quebec Superior Court and the U.S. Department of Justice, as well as the necessary approvals from shareholders of both Abitibi-Consolidated and Bowater. The combination is expected to close by the end of the month, following the completion of certain administrative formalities.
Announcing the agreement, Abitibi-Consolidated President and Chief Executive Officer John W. Weaver commented, "We appreciate the hard work of the U.S. Department of Justice staff and everyone else involved in completing this process, and with this last approval, we look forward to closing the proposed transaction quickly. We are eager to begin the work of building a new company that creates long-term value for all of our stakeholders."
"We believe the significant synergies we anticipate to generate from the combination will create a stronger company, better positioned to address the challenges of today's marketplace," added David J. Paterson, Chairman, President and Chief Executive Officer of Bowater. "We expect that a more efficient manufacturing platform will enable us to deliver more value through better product quality and improved logistical flexibility."
Abitibi-Consolidated and Bowater also announced that each company will release their respective third quarter 2007 results before the markets open on Tuesday, November 6, 2007. Further information regarding the companies' earnings calls for analysts, and the manner in which the calls may be accessed, will be made available shortly.
The combined company, which will be called AbitibiBowater Inc., will produce a wide range of newsprint and commercial printing papers, market pulp and wood products. It will be the eighth largest pulp and paper manufacturer in the world. Following the required divestiture, 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. It will also be among the world's largest recyclers of newspapers and magazines, and will have more third-party certified sustainable forest land than any other company in the world. The new company's shares will trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange.
About Abitibi-Consolidated Inc. Abitibi-Consolidated is a global leader in newsprint and commercial printing papers as well as a major producer of wood products, serving clients in some 70 countries from its 45 operating facilities. Abitibi-Consolidated is among the largest recyclers of newspapers and magazines in North America, diverting annually approximately 1.7 million tonnes of paper from landfills, and is an industry leader in Canada in terms of forest certification.
About Bowater Incorporated Bowater is a leading producer of coated and specialty papers and newsprint. In addition, the company sells bleached market pulp and lumber products. Bowater has 12 pulp and paper mills in the United States, Canada and South Korea. In North America, it also operates one converting facility and owns 9 sawmills. Bowater's operations are supported by approximately 708,000 acres of timberlands owned or leased in the United States and Canada and 28 million acres of timber cutting rights in Canada. Bowater operates six recycling plants and is one of the world's largest consumers of recycled newspapers and magazines.
Contacts
Parties interested in the Snowflake mill and related assets should contact directly Scotia Capital Inc., attention: Jeff Drummond - Managing Director (514) 287-3630.
Source: ABITIBI-CONSOLIDATED INC.
CONTACT: Media: Seth Kursman, Vice President,Communications and Government Affairs Abitibi-Consolidated, (514) 394-2398, seth_kursman@abitibiconsolidated.com;
Media: Kathleen M. Bennett, Vice President - Government Affairs, Communications and Environment, Bowater, (864) 282-9452, bennettkm@bowater.com
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