Swift Consolidation Sweeps Paper Industry
Abitibi-Consolidated said it will offer C$42 in cash and stock for each Donohue share. Abitibi is the world’s largest newsprint maker, while Donohue is North America’s third-largest producer.
Abitibi President and CEO John Weaver called his deal “a rare and fortuitous opportunity brought on by Quebecor’s decision to divest its interest in Donohue and we were ready to act.”
As for possible closures as part of the deal, Weaver said that he does not foresee the sale or closure of any of Donohue’s fixed assets, but that there may be some mill or machine closures at Abitibi’s operations.
In the St. Laurent deal, shareholders will receive $12.50 plus one-half share of Smurfit-Stone common stock for each share of St. Laurent, while Smurfit-Stone assumes $386 million in St. Laurent debt.
According to Ray Curran, president and CEO of Smurfit-Stone, “The combination of these packaging businesses into one North American unit will generate approximately US$50 million annually in cost savings. In addition, by joining Smurfit-Stone’s containerboard system with St. Laurent capabilities we will create significant new opportunities to optimize our containerboard manufacturing costs. Finally, St. Laurent management has done an excellent job in the past 12 months of reducing costs and increasing production. We expect to continue with this progress.”
Ray Curran, president and CEO of Smurfit-Stone, says the acquisition of St. Laurent will generate approximately US$50 million annually in cost savings.