Abitibi, Bowater merger approved in Canada

By Lisa Kerner

Charlotte, N.C., July 25 - The Federal Minister of Industry, under the Investment Canada Act, approved the proposed merger of Abitibi-Consolidated Inc. and Bowater Inc.

As part of the approval, the combined company AbitibiBowater Inc. agreed to keep its headquarters in Montreal for three years and to keep at least five Canadians on its board of directors. AbitibiBowater will also apply to list its common stock on the Toronto Stock Exchange.

The transaction is expected to close in the third quarter of 2007, according to a company news release.

As previously reported, Abitibi-Consolidated and Bowater shareholders will vote on the proposed merger at separate meetings on Thursday. Bowater Canada Inc. held a special meeting in connection with the merger on Wednesday.

Under the companies' merger agreement, each common share of Abitibi-Consolidated will be exchanged for 0.06261 of a common share of AbitibiBowater. 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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