Abitibi, Bowater decide to combine |
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Mon, 29 Jan 2007 14:15
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NEW YORK (AFX) - Abitibi-Consolidated Inc. and Bowater Inc. said Monday they will combine to form the third largest publicly traded paper and forest products company in North America in an all stock deal.Under the agreement, Abitibi shareholders will get 0.06261 common share of the combined company for their shares, and Bowater shareholders will get 0.52 common share for theirs. The resulting mix will leave 48 percent of shares in the hands of former Abitibi-Consolidated shareholders and 52 percent in the hands of former Bowater shareholders.The companies have a current combined market capitilization of $2.43 billion.The resulting company, AbitibiBowater, will have pro forma annual revenues of about $7.9 billion, and rank as the world's eighth largest publicly traded paper and forest products company.Abitibi President and Chief Executive John W. Weaver will become executive chairman of AbitibiBowater, and Bowater Chairman, President and CEO David J. Paterson will serve as president and CEO. Each company will contribute 7 directors to the resulting board.The company will be based in Montreal, Quebec, where Abitibi is currently based, with a U.S. regional manufacturing and sales office in Greenville, S.C., current site of Bowater headquarters.The companies expect the transaction to close by the third quarter of 2007.Abitibi shares closed at $2.64 Friday on the New York Stock Exchange. Bowater shares rose 14 cents to $22.29 in electronic premarket activity, after closing Friday at $22.15 on the NYSE.Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Abitibi-Consolidated, Bowater agree to merge 