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Abitibi-Consolidated and Bowater Combination Approved
Montreal, Quebec, Canada, and Greenville, South Carolina, USA, 23 October 2007 -- /PRNewswire/ -- Abitibi-Consolidated Inc. (NYSE:ABY)(NYSE:TSX:)(NYSE:A) and Bowater Incorporated (NYSE: BOW)(NYSE:TSX:)(NYSE:BWX) today announced that they have reached an agreement with the United States Department of Justice that will allow the completion of the proposed combination of the two companies.

Under the terms of the agreement, which was signed and filed today in the U.S. Federal District Court in Washington, D.C., the companies have agreed to divest one newsprint mill, Abitibi-Consolidated's mill in Snowflake, Arizona. The Snowflake mill has an annual capacity of approximately 375,000 metric tons. Scotia Capital Inc. will be engaged as exclusive financial advisor for the sale of the Snowflake mill and related assets, and all inquiries or expression of interest should be forwarded directly to their attention.

The proposed combination has now received all necessary regulatory approvals, including those from the Canadian Competition Bureau, the Federal Minister of Industry under the Investment Canada Act, the Quebec Superior Court, and the U.S. Department of Justice, and the necessary approvals from shareholders of both Abitibi-Consolidated and Bowater. The combination is expected to close by the end of the month, following the completion of certain administrative formalities.

Announcing the agreement, John W. Weaver, Abitibi-Consolidated president and chief executive officer commented, "We appreciate the hard work of the U.S. Department of Justice staff and everyone else involved in completing this process, and with this last approval, we look forward to closing the proposed transaction quickly. We are eager to begin the work of building a new company that creates long-term value for all of our stakeholders."

David J. Paterson, chairman, president, and chief executive officer of Bowater said, "We expect that a more efficient manufacturing platform will enable us to deliver more value through better product quality and improved logistical flexibility."

Abitibi-Consolidated and Bowater also announced that each company will release their respective third quarter 2007 results before the markets open on 06 November 2007. Further information regarding the companies' earnings calls for analysts, and the manner in which the calls may be accessed, will be made available shortly.

The combined company, which will be called AbitibiBowater Inc., will produce a wide range of newsprint and commercial printing papers, market pulp, and wood products. It will be the eighth largest pulp and paper manufacturer in the world. Following the required divestiture, AbitibiBowater will own or operate 31 pulp and paper facilities and 35 wood product facilities located in the United States, Canada, the United Kingdom, and South Korea. It will also be among the world's largest recyclers of newspapers and magazines, and will have more third-party certified sustainable forest land than any other company in the world. The new company's shares will trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange.

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 paper from landfills, and is an industry leader in Canada in terms of forest certification.

About Bowater Incorporated

Bowater 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 nine sawmills. Bowater's operations are supported by approximately 708,000 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.

Source: Abitibi-Consolidated Inc.

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