Bowater-Abitibi Merger

Bobby Willig, Jith Jayaratne, Jay Ezrielev, and a Compass Lexecon team in San Francisco and Washington, D.C. provided economic analyses for Abitibi Consolidated Inc. and Bowater Inc. in their $1.6 billion merger. The merger between the two largest manufacturers of newsprint and several other paper products in North America was closely scrutinized by the U.S. Department of Justice. Using a dynamic Critical Loss Analysis model, Compass Lexecon was able to demonstrate that the merged firm would not have the incentive or ability to raise prices following the merger. The deal was approved by the Department of Justice subject to the divestiture of one newsprint mill. Abitibi was represented by Joe Simons at Paul Weiss Rifkind Wharton & Garrison LLP, and Bowater was represented by Mark Ryan at Mayer Brown LLP.