• Bowater shares are down to $23 from a high of $59 in 2000 while Abitibi shares are down from $20 a decade ago to $2.80
• The combined company will be the third largest forest-products company in the US behind Weyerhaeuser (WY) and International The merged company will have 50% market share of the North American newsprint business
• The decline in newsprint demand might have bottomed as demand from emerging markets is beginning to offset the decline in mature markets. Newsprint demand grew 1% last year. However, North American demand decreased 7%
• By 2008, global newsprint demand could increase 2%, according to Citigroup

Bowater & Abitibi deal might point to industry bottom originally appeared on BloggingStocks on Mon, 02 Apr 2007 08:00:00 EST. Please see our terms for use of feeds.

Abitibi-Consolidated Inc. (NYSE:ABY) and Bowater Inc. (NYSE:BOW) are very much alike. Both companies are in the paper business. And, yes, both companies have been dealing with the problems of lagging newspapers and magazines growth.

Well, now these companies are going to merge. The new name? It will be AbitibiBowater.

True, it's a terrible name (I'm really not sure how to pronounce it). Then again, the brand really doesn't matter so much because the companies do not sell to consumers.

However, Wall Street loves the deal. Basically, AbitibiBowater should realize tremendous cost savings. The estimate is about $250 million per year.

Currently, Abitibi's stock price is up 27% and Bowater is up 30%.

However, there could be a hitch -- antitrust complications. But, in light of some of the tough foreign competitors and the difficulties in the print market, U.S. regulators may let the AbitibiBowater deal get done.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Abitibi and Bowater trying to print more money originally appeared on BloggingStocks on Mon, 29 Jan 2007 11:22:00 EST. Please see our terms for use of feeds.

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Analyst downgrades 1-16-07: limited upside seen at XM Satellite Radio originally appeared on BloggingStocks on Tue, 16 Jan 2007 11:08:00 EST. Please see our terms for use of feeds.