Abitibi-Price, Stone-Consolidated to Merge

Abitibi-Price Inc., the world’s largest newsprint producer, has agreed to merge with its main competitor, Stone-Consolidated Corp., in a deal worth about $1.7 billion. Falling paper prices have been squeezing profits industrywide, producing the kind of environment that often drives companies to combine so they can operate more efficiently. Under the agreement, each common share of Toronto-based Abitibi-Price will be exchanged for one common share of the merged company, to be called Abitibi-Consolidated Inc., and each common share of Stone-Consolidated will be exchanged for 1.0062 common shares of Abitibi-Consolidated. The companies said Ronald Oberlander, chairman and chief executive of Abitibi-Price, will be operating chairman of Abitibi-Consolidated. James Doughan, president and chief executive of Stone-Consolidated, will become CEO of the new merged company. Chicago-based Stone Container Corp., which owns 46.6% of Montreal-based Stone-Consolidated, would hold about 25% of Abitibi-Consolidated.