Bowater, Abitibi stockholders overwhelmingly approve merger of equals

By Lisa Kerner

Charlotte, N.C., July 26 - Stockholders of both Bowater Inc. and Abitibi-Consolidated Inc. approved the proposed merger of equals of the two companies at separate meetings held on Thursday.

Approximately 70% of Bowater's outstanding shares and 80% of Abitibi's outstanding shares were cast in favor of the transaction, which is slated to close in the third quarter.

Under the companies' Jan. 29 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.

Once the merger is complete the combined company, AbitibiBowater Inc., will trade on the New York Stock Exchange and the Toronto Stock Exchange under the ticker symbol "ABH." AbitibiBowater will own or operate 32 pulp and paper facilities and 35 wood products facilities located in the United States, Canada, the United Kingdom and South Korea.

"This is an historic day for Bowater, and I am very pleased that our stockholders have expressed their strong support for our proposed combination with Abitibi-Consolidated," Bowater chairman, president and chief executive officer David J. Paterson stated in a company news release. "Together, we will have a better positioned company that will offer stockholders a chance to participate in the significant upside of a financially and competitively stronger company."

Bowater shareholders also voted to elect to the board of directors nominees Arthur R. Sawchuk, Richard B. Evans and Gordon D. Giffin, and ratified the appointment of KPMG LLP as Bowater's independent registered public accounting firm.

Shareholders of Bowater Canada Inc., an exchangeable share Canadian public subsidiary of Bowater, approved certain amendments to Bowater Canada's articles required to facilitate the Bowater and Abitibi merger at their meeting on Wednesday.

"I am very pleased to see that our shareholders share the same perspective on the benefit of the proposed combination with Bowater," Abitibi president and CEO John Weaver added. "We believe AbitibiBowater will be a global leader with a brighter future than either company would have on its own."

As part of the merger approval under the Investment Canada Act, AbitibiBowater agreed to keep its headquarters in Montreal for three years and to keep at least five Canadians on its board of directors.

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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