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
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