Bowater signed a definitive
agreement to acquire all the outstanding shares of Alliance Forest Products
Inc., a Montreal-based forest products company.
The value of the
transaction, including assumed debt, is about $770 million. Both companies’ boards have approved the
deal.
The combining of the two
companies will bring Alliance’s focus on supercalendered and specialty papers
with Bowater’s coated groundwood and value-added papers.
Through the combination,
Bowater will increase its annual newsprint, coated and specialty papers
capacity to approximately 4.6 million metric tons. Annual lumber capacity will
also increase to 1.0 billion board feet.
Bowater is the second
largest producer of newsprint in North America and the third largest producer
of market pulp. With the conversion of a newsprint machine to coated papers at
its Catawba, SC mill, the construction of a new coating line at its Michigan
Nuway facility and two additional Nuway facilities in the mid-South region and
the mid-Atlantic region, by the end of 2002 Bowater will have over 1.6 million
short tons of coated, supercalendered and other specialty grades and will be
one of the world's premier producers of these groundwood papers.

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