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Management Side
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Abitibi-Consolidated and Bowater Amend Combination Agreement
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Montreal, Quebec, Canada, and Greenville, South Carolina, USA, 08 May 2007 -- /PRNewswire/ -- Abitibi-Consolidated Inc. and Bowater Incorporated announced today that they have amended the combination agreement signed on 29 January 2007, pursuant to which Abitibi-Consolidated and Bowater agreed to combine their companies in an all-stock merger of equals. The purpose of the amendment is to ensure that the combination remains tax deferred for U.S. resident holders of Abitibi-Consolidated shares.

As amended, the combination agreement limits the number of exchangeable shares that may be issued to an amount that, when combined with exchangeable shares currently issued to holders of exchangeable shares of a Canadian subsidiary of Bowater, is less than 20% of the total voting power of AbitibiBowater. In the event that eligible Abitibi-Consolidated shareholders elect to receive more exchangeable shares than are available pursuant to the limit, the remainder of their shares will be exchanged for shares of AbitibiBowater common stock, pro rata to their shareholdings.

On the basis of publicly available information regarding the current shareholdings of Abitibi-Consolidated, Abitibi-Consolidated and Bowater believe that it is unlikely that eligible Canadian shareholders of Abitibi-Consolidated will be limited in their ability to receive exchangeable shares and to benefit from a tax deferral for Canadian income tax purposes.

About Abitibi-Consolidated Inc.

Abitibi-Consolidated is a global leader in newsprint and commercial printing papers as well as a major producer of wood products, serving clients in some 70 countries from its 45 operating facilities. Abitibi-Consolidated is among the largest recyclers of newspapers and magazines in North America, diverting annually approximately 1.7 million metric tons of waste paper from landfills. It also ranks first in Canada in terms of total certified woodlands.

About Bowater Incorporated

Bowater Incorporated is a leading producer of coated and specialty papers and newsprint. In addition, the company sells bleached market pulp and lumber products. Bowater has 12 pulp and paper mills in the United States, Canada, and South Korea. In North America, it also operates one converting facility and owns 10 sawmills. Bowater's operations are supported by approximately 763,000 acres of timberlands owned or leased in the United States and Canada and 28 million acres of timber cutting rights in Canada. Bowater operates six recycling plants and is one of the world's largest consumers of recycled newspapers and magazines.

Additional Information

In connection with the proposed combination, AbitibiBowater has filed with the Securities and Exchange Commission (SEC) a preliminary registration statement on Form S-4, which includes a preliminary proxy statement/prospectus of Bowater and a management information circular of Abitibi-Consolidated. Shareholders are urged to read the preliminary joint proxy statement/prospectus/management information circular regarding the proposed combination, and the definitive proxy statement/prospectus/management information circular when it becomes available, because it contains or will contain important information.

Shareholders will be able to obtain a free copy of the definitive joint proxy statement/prospectus/management information circular, as well as other filings containing information about Abitibi-Consolidated and Bowater, without charge, at the SEC's internet site (http://www.sec.gov/) and on SEDAR (http://www.sedar.com/). Copies of the definitive joint proxy statement/prospectus/management information circular and the filings with the SEC and the Canadian securities regulatory authorities that will be incorporated by reference in the definitive joint proxy statement/prospectus/management information circular can also be obtained, without charge, by directing a request to Abitibi-Consolidated, 1155 Metcalfe Street, Suite 800, Montreal, Quebec, Canada H3B 5H2, Attention: Investor Relations Department, (514) 875-2160, or to Bowater, 55 E. Camperdown Way, Greenville, SC, USA, 29602, Attention: Investor Relations Department, (864) 282-9473.

Source: ABITIBI-CONSOLIDATED INC.


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