Big Deal in Newsprint and Paper

By Randy Davidson on January 30th, 2007

Abitibi-Consolidated and Bowater today announced a definitive agreement to combine in an all-stock merger. This is a big deal in the publication papers market - the combined company will have revenues of nearly $8 billion.

Business Week says the company should be able to cut annual costs by about $250 million. Other highlights from the article:

- The two CEOs have been working on the deal for about three months.

- The combined company will own or operate 32 pulp and paper facilities and 35 wood product facilities located mainly in eastern Canada and the southeastern U.S.

- anticipated savings “are not predicated on any mill closures.”

- “It buys them time.. But the broad structural issues in the industry are still the same,” Kevin Mason, an analyst with Equity Research Associates

See the full article.