Abitibi-Consolidated and Bowater Amend Combination Agreement


A (TSX) BWX (TSX) ABY (NYSE) BOW (NYSE)

MONTREAL and GREENVILLE, SC, May 8 / -- Abitibi-Consolidated Inc. and Bowater Incorporated announced today that they have amended the combination agreement signed on January 29, 2007 pursuant to which Abitibi-Consolidated and Bowater agreed to combine their companies in an all-stock merger of equals. The purpose of the amendment is to ensure that the combination remains tax deferred for U.S. resident holders of Abitibi-Consolidated shares.

As amended, the combination agreement limits the number of exchangeable shares that may be issued to an amount that, when combined with exchangeable shares currently issued to holders of exchangeable shares of a Canadian subsidiary of Bowater, is less than 20% of the total voting power of AbitibiBowater. In the event that eligible Abitibi-Consolidated shareholders elect to receive more exchangeable shares than are available pursuant to the limit, the remainder of their shares will be exchanged for shares of AbitibiBowater common stock, pro rata to their shareholdings.

Based on publicly available information regarding the current shareholdings of Abitibi-Consolidated, Abitibi-Consolidated and Bowater believe that it is unlikely that eligible Canadian shareholders of Abitibi-Consolidated will be limited in their ability to receive exchangeable shares and to benefit from a tax deferral for Canadian income tax purposes.

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 waste paper from landfills. It also ranks first in Canada in terms of total certified woodlands.

About Bowater Incorporated
Bowater Incorporated 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 10 sawmills. Bowater's operations are supported by approximately 763,000 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.

Additional Information and Where to Find It
In connection with the proposed combination, AbitibiBowater has filed with the Securities and Exchange Commission (SEC) a preliminary registration statement on Form S-4, which includes a preliminary proxy statement/prospectus of Bowater and a management information circular of Abitibi-Consolidated. Shareholders are urged to read the preliminary joint proxy statement/prospectus/management information circular regarding the proposed combination, and the definitive proxy statement/prospectus/management information circular when it becomes available, because it contains or will contain important information. Shareholders will be able to obtain a free copy of the definitive joint proxy statement/prospectus/management information circular, as well as other filings containing information about Abitibi-Consolidated and Bowater, without charge, at the SEC's internet site (http://www.sec.gov/) and on SEDAR (http://www.sedar.com/). Copies of the definitive joint proxy statement/prospectus/management information circular and the filings with the SEC and the Canadian securities regulatory authorities that will be incorporated by reference in the definitive joint proxy statement/prospectus/management information circular can also be obtained, without charge, by directing a request to Abitibi-Consolidated, 1155 Metcalfe Street, Suite 800, Montreal, Quebec, Canada H3B 5H2, Attention: Investor Relations Department, (514) 875-2160, or to Bowater, 55 E. Camperdown Way, Greenville, SC, USA, 29602, Attention: Investor Relations Department, (864) 282-9473.

Participants in the Solicitation
Abitibi-Consolidated, Bowater and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed combination. Information regarding Abitibi-Consolidated's directors and executive officers is available in Abitibi-Consolidated's Annual Information Form for the year ended December 31, 2006 filed on SEDAR by Abitibi-Consolidated on March 15, 2007 (which was filed with the SEC on March 15, 2007 on Form 40-F), and the management proxy circular with respect to Abitibi-Consolidated's 2007 Annual Meeting of Shareholders filed by Abitibi-Consolidated on SEDAR on April 5, 2007 (which was filed with the SEC on April 5, 2007 on Form 6-K). Information regarding Bowater's directors and executive officers is available in the Annual Report on Form 10-K for the year ended December 31, 2006 filed with the SEC by Bowater on March 1, 2007, as amended by Amendment # 1 filed with the SEC by Bowater on April 30, 2007 and in the preliminary proxy statement with respect to Bowater's 2007 Annual Meeting of Stockholders which is included in the preliminary registration statement on Form S-4 filed by AbitibiBowater on March 20, 2007, as amended on May 8, 2007. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the preliminary proxy statement/prospectus/management information circular filed with the SEC and will be contained in the definitive joint proxy statement/prospectus/management information circular and other relevant materials to be filed with the SEC and the Canadian securities regulatory authorities when they become available.

Contacts
Investors:
Abitibi-Consolidated
Francesco Alessi
Vice-President, Investor Relations
and Taxation
(514) 394-2341
falessi@abitibiconsolidated.com

Investors:
Bowater
Duane A. Owens
Vice President and Treasurer
(864) 282-9488

Media:
Abitibi-Consolidated
Denis Leclerc
Director, Public Affairs
(514) 394-3601
denis_leclerc@abitibiconsolidated.com

Media:
Bowater
Jim Barron/Dan Gagnier/Kara Findlay
Sard Verbinnen & Co
(212) 687-8080

Source: ABITIBI-CONSOLIDATED INC.

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