DEPARTMENT OF JUSTICE ORDERS DIVESTITURE IN ABITIBI/BOWATER MERGER

On October 24, 2007, the Department of Justice (“DOJ”) announced that it will require two of the nation’s largest newsprint manufacturers – Abitibi-Consolidated Inc. and Bowater Inc.- to divest a newsprint mill in Arizona. As originally laid out, the DOJ alleged that the $1.6 billion transaction would have considerably hampered competition in the production and sale of newsprint in North America.

The proposed consent decree calls for Abitibi and Bowater to divest Abitibi’s newsprint mill in Snowflake, Arizona. The Snowflake mill is one of the largest and most profitable newsprint mills in North America. Further, the combined company is required to notify the Department before acquiring an additional interest in any mill or machine that is currently jointly-owned by either Abitibi or Bowater with any third party, if the value of the acquisition exceeds $2 million.

Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com