Abitibi-Consolidated/Bowater Merger Proxy Filed

Abitibi-Consolidated Inc. (ABY) filed the first amended proxy statement for its Bowater Inc. (BOW) merger transaction with the SEC on May 8, 2007.

Shareholder meeting details are not included in the revised document.

The regulatory matters section of the proxy states the following:

Both Abitibi and Bowater intend to respond to the [HSR] second request and to work toward a closing of the combination in the third quarter of 2007.

Abitibi and Bowater have been advised that the time required by the (Competition Canada) Commissioner to complete her substantive review of the combination will extend beyond the end of the statutory waiting period which terminated on April 2, 2007.

AbitibiBowater filed an application for review under the Investment Canada Act on April 20, 2007.

Although its not much to go on, the fact that the companies openly state a third quarter target for HSR clearance and completion is a very good indication that significant progress is being made with the key regulators.

It has been suggested in several reports that a third quarter close is possible if, and only if, the companies are willing and able to openly cooperate with the FTC and Competition Bureau in their reviews. This essentially means offering divestitures, rather than making the regulators force divestitures in one or more overlapping geographic markets. Given the companies' current close projection, it must be assumed that they are indeed providing options on their own and have most likely received some level of favorable response from the regulators.

There is no reason at this point to anticipate slippage into the fourth quarter for this transaction.

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