The Abitibi/Bowater Newsprint Merger: Did DOJ Paper Over the Problem?

After a nine-month investigation, on October 23, 2007 the Antitrust Division of the Department of Justice (DOJ) announced a consent decree settlement allowing the merger of Abitibi Consolidated Inc. and Bowater Incorporated, the two largest North American producers of newsprint in an already concentrated and economically declining industry. Although the two parties owned 19 large newsprint mills in North America — including a heavy overlapping concentration in the Southeastern United States — and are involved in several other newsprint joint ventures with third parties, the DOJ required the divestiture of only a single Abitibi-owned mill in Snowflake, Arizona. The Newspaper Association of America, representing the vast majority of U.S. newsprint customers, immediately and sharply criticized the DOJ’s action as essentially “papering over” the problem.

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