ROANOKE TIMES 
                      Copyright (c) 1997, Roanoke Times

DATE: Monday, February 17, 1997              TAG: 9702170085
SECTION: BUSINESS                 PAGE: A-6  EDITION: METRO 
DATELINE: TORONTO
SOURCE: Associated Press

NEWSPRINT PRODUCERS TO MERGE ABITIBI, STONE-CONSOLIDATED ANNOUNCE DEAL

Abitibi-Price Inc., the world's largest newsprint producer, has announced that it will merge with competitor Stone-Consolidated Corp. in a deal worth about $1.7 billion.

The stock-swap transaction announced Friday will create a new company called Abitibi-Consolidated Inc. 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.

Abitibi and Stone-Consolidated expect their merger to result in more than $74 million in savings annually, on combined revenue of $3.6 billion a year. The new company will have a total of 18 paper mills.

Abitibi-Consolidated will have a market value of $3.1 billion, based on current prices. The deal, which is subject to shareholder and regulatory approval, is expected to be completed in the year's second quarter.

Abitibi-Price, which is based in Toronto, makes paper at 10 mills in North America and sells it around the world. It is also a major distributor of office products in North America and Western Europe.

Stone-Consolidated, of Montreal, also one of the biggest newsprint producers, is a leading supplier of paper and wood products with operations in Canada, the United States and Britain. Stone Container Corp. of Chicago owns 47 percent of its stock and has agreed to vote for the merger.

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