A proposed merger between Abitibi-Consolidated and Bowater Inc. announced this morning has Communications, Energy and Paperworkers of Canada representatives wondering what the unexpected news will mean to mill operations here and elsewhere.
“I’m always concerned when you get two major players merge, and they say there will be ‘syngeries’ realized,” national CEP rep Rene Lindquist said in an interview this morning.
“The other thing is Jan. 9, we just ratified the contract extension to get the bio-mass boiler. What happens with that?” he added. “Everything’s up in the air.
“I like to think positive that things will move ahead, but who knows?” continued Lindquist. “Does that Abitibi board still have the authority to approve $70 million [for the bio-mass boiler] or is that being re-scrutinized?”
Lindquist said the proposed merger has to go through the securities commission and there’s certain things the companies still have to do, which may take six-nine months to fall into place.
“At the end of the day, it may be good—but it’s in my nature to be suspicious,” said Lindquist.
Local mill management was contacted this morning, but deferred any comment to Abitibi’s corporate head office in Monteal.
Denis Leclerc, director of public affairs for Abitibi-Consolidated, could not be reached for comment prior to press time today.
A story by The Canadian Press this morning said Abitibi-Consolidated Inc. and Bowater Inc. have announced plans for a “merger of equals”—a stock-swap deal creating a firm with annual revenues of about $9.3 billion.
The combined company, to be called AbitibiBowater Inc., would create a new leader in publication papers.
The headquarters and executive office would be in Montreal, with a U.S. regional manufacturing and sales office in Greenville, S.C., where Bowater is based.
AbitibiBowater, with a market capitalization of about $1.37 billion, would own or operate 32 pulp and paper facilities and 35 wood product sites, mainly in Eastern Canada and the southeastern U.S.
AbitibiBowater’s product lines will include newsprint, uncoated and coated mechanical papers, market pulp and wood products. The company also would be one of the world’s leading consumers of recycled newspapers and magazines, CP reported.
‘‘The new AbitibiBowater will be a global leader headquartered in Canada with a brighter future than either company would have on its own,’’ John Weaver, CEO of Abitibi-Consolidated, said in a release.
‘‘The combined company’s ability to realize significant synergies will increase shareholder value, improve our financial flexibility and better position us to compete in today’s increasingly competitive global marketplace.’’
Weaver would be executive chairman of AbitibiBowater while David Paterson, chairman and CEO of Bowater, would be chief executive officer of the new firm.
The new board of directors would have seven members from each of the old companies.
Under terms of the transaction, each common share of Abitibi-Consolidated would be exchanged for 0.06261 of a common share of AbitibiBowater, and each Bowater share would be exchanged for 0.52 of a share of AbitibiBowater.
That ratio will result in 48 percent of AbitibiBowater being owned by former Abitibi-Consolidated shareholders and 52 percent by former Bowater shareholders.
—With notes from the Canadian Press
Fort Frances Times
Local News from Across the Rainy River District
