Federal Register / Vol. 72, No. 216 / Thursday, November 8, 2007 / Notices 63187 

P.O. Box 7611, U.S. Department of 

Justice, Washington, DC 20044–7611. 

Comments should refer to In re Asarco 

LLC, Case No. 05–21207 (Bankr. S.D. 

Tex.), and DJ Ref. No. 90–11–3–08633. 

The proposed Settlement Agreement 

may be examined at: (1) The Office of 

the United States Attorney for the 

Southern District of Texas, 800 North 

Shoreline Blvd, #500, Corpus Christi, 

TX 78476–2001; (2) the Region 6 Office 

of the United States Environmental 

Protection Agency, 1445 Ross Avenue, 

Suite 1200, Dallas, Texas 75202; and (3) 

the Region 7 Office of the United States 

Environmental Protection Agency, 901 

North Fifth Street, Kansas City, KS 

66101. During the comment period, the 

proposed Settlement Agreement may 

also be examined on the following 

Department of Justice Web site: 

http://www.usdoj.gov/enrd/ 

Consent_Decree.html. A copy of the 

proposed Settlement Agreement may 

also be obtained by mail from the 

Department of Justice Consent Decree 

Library, P.O. Box 7611, Washington, DC 

20044–7611 or by faxing or e-mailing a 

request to Tonia Fleetwood 

(tonia.fleetwood@usdoj.gov, fax no. 

(202) 514–0097, phone confirmation 

number (202) 514–1547. In requesting a 

copy from the Consent Decree Library, 

please refer to the referenced case and 

D.J. Reference No. 90–11–3–08633, and 

enclose a check in the amount of $4.25 

for the Settlement Agreement (21 pages 

at 25 cents per page reproduction costs), 

made payable to the U.S. Treasury. 

Robert E. Maher, Jr., 

Assistant Chief, Environmental Enforcement 

Section, Environment and Natural Resources 

Division. 

[FR Doc. 07–5581 Filed 11–7–07; 8:45 am] 

BILLING CODE 4410–15–M 

DEPARTMENT OF JUSTICE 

Antitrust Division 

United States v. Abitibi-Consolidated, 

Inc. and Bowater Incorporated; 

Proposed Final Judgment and 

Competitive Impact Statement 

Notice is hereby given pursuant to the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. 16(b)–(h), that a Complaint, 

proposed Final Judgment, Asset 

Preservation Stipulation and Order, and 

Competitive Impact Statement have 

been filed with the United States 

District Court for the District of 

Columbia in United States v. AbitibiConsolidated, Inc. and Bowater 

Incorporated, Civ. Action No. 

1:07CV01912. On October 23, 2007, the 

United States filed a Complaint alleging 

that the proposed merger between 

Abitibi-Consolidated Inc. (‘‘Abitibi’’) 

and Bowater Incorporated would violate 

section 7 of the Clayton Act, 15 U.S.C. 

18. The Complaint alleges that the 

acquisition would substantially reduce 

competition for the production, 

distribution, and sale of newsprint in 

the United States. Specifically, the 

Complaint alleges that the merger would 

enhance the merged firm’s ability and 

incentive to reduce their combined 

newsprint output and anticompetitively 

raise newsprint prices in the United 

States. The proposed Final Judgment, 

also filed on October 23, 2007, requires 

the parties to divest Abitibi’s Snowflake, 

Arizona newsprint mill. A Competitive 

Impact Statement filed by the United 

States describes the Complaint, the 

proposed Final Judgment, and the 

remedies available to private litigants 

who may have been injured by the 

alleged violation. 

Copies of the Complaint, proposed 

Final Judgment, Asset Preservation 

Stipulation and Order, and Competitive 

Impact Statement are available for 

inspection at the Department of Justice, 

Antitrust Division, 325 Seventh Street, 

NW., Suite 215, Washington, DC 20530 

(202–514–2481), on the Internet at 

http://www.usdoj.gov/atr, and at the 

Office of the Clerk of the United States 

District Court for the District of 

Columbia. Copies of these materials may 

be obtained from the Antitrust Division 

upon request and payment of the 

copying fee. 

Public comment is invited within 

sixty (60) days of the date of this notice. 

Such comments, and responses thereto, 

will be published in the Federal 

Register and filed with the Court. 

Comments should be directed to Joseph 

Miller, Assistant Chief, Litigation I 

Section, Antitrust Division, Department 

of Justice, 1401 H Street, NW., Suite 

4000, Washington, DC 20530 (202–307–

0001). 

J. Robert Kramer II, 

Director of Operations, Antitrust Division. 

The United States District Court for the 

District of Columbia 

United States of America, Department 

of Justice, Antitrust Division, 1401 H 

Street, NW., Suite 4000, Washington, 

DC 20530, Plaintiff, v. AbitibiConsolidated Inc., 1155 Metcalfe Street, 

Suite 800, Montre ́al, QC H3B 5H2, 

Canada, and Bowater Incorporated, 55 

E. Camperdown Way, Greenville, SC 

29601, Defendants; Case No.:llll. 

Case: 1:07-cv-01912, Assigned To: 

Collyer, Rosemary M., Assign. Date: 10/ 

23/2007, Description: Antitrust. 

Complaint 

The United States of America, acting 

under the direction of the Acting 

Attorney General of the United States, 

brings this civil action to enjoin the 

proposed merger of Defendants AbitibiConsolidated Inc. (‘‘Abitibi’’) and 

Bowater Incorporated (‘‘Bowater’’). The 

United States alleges as follows: 

I. Nature of the Action 

1. On January 29, 2007, Abitibi and 

Bowater announced plans to merge into 

a new company to be called 

AbitibiBowater Inc. in a transaction 

valued at $1.6 billion. 

2. Abitibi and Bowater are the two 

largest newsprint producers in North 

America. The combination of these two 

firms will create a newsprint producer 

three times larger than the next largest 

North American newsprint producer. 

After the merger, the combined firm will 

have the incentive and ability to 

withdraw capacity and raise newsprint 

prices in the North American newsprint 

market. 

3. Unless the proposed transaction is 

enjoined, Defendants’ merger will 

substantially lessen competition in the 

production and sale of newsprint, in 

violation of section 7 of the Clayton Act, 

15 U.S.C. 18. 

II. Jurisdiction and Venue 

4. The United States brings this action 

under section 15 of the Clayton Act, as 

amended, 15 U.S.C. 25, to prevent and 

restrain Defendants from violating 

section 7 of the Clayton Act, 15 U.S.C. 

18. 

5. Both Defendants produce and sell 

newsprint in the flow of interstate 

commerce. Defendants’ production and 

sale of newsprint substantially affect 

interstate commerce. This Court has 

subject matter jurisdiction over this 

action pursuant to section 15 of the 

Clayton Act, 15 U.S.C. 25 and 28 U.S.C. 

1331, 1337(a), and 1345. 

6. Defendants have consented to 

venue and personal jurisdiction in this 

judicial district. 

III. Defendants to the Proposed 

Transaction 

7. Abitibi, the largest newsprint 

supplier in North America, is a 

Canadian corporation with its principal 

place of business in Montre ́al, Quebec, 

Canada. Abitibi produces and sells 

newsprint to customers around the 

world. Abitibi owns and operates, either 

solely or with other firms, eleven paper 

mills in the United States and Canada 

that currently produce newsprint, as 

well as one mill in the United Kingdom. 

In 2006, Abitibi’s total sales were 

approximately $4.85 billion, including 


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approximately $1.7 billion in aggregate 

North American newsprint sales. 

8. Bowater, the second-largest 

newsprint supplier in North America, is 

incorporated in Delaware with its 

principal place of business in 

Greenville, South Carolina. Bowater 

owns and operates, either solely or with 

other firms, eight paper mills in the 

United States and Canada that currently 

produce newsprint, as well as one mill 

in South Korea. In 2006, Bowater’s total 

sales were approximately $3.53 billion, 

including approximately $1.1 billion in 

aggregate North American newsprint 

sales. 

IV. Trade and Commerce 

A. The Relevant Market 

1. Product Market: Newsprint 

9. Newsprint is the lowest grade of 

uncoated groundwood paper (i.e., paper 

manufactured from mechanically 

processed pulp). In 2006, approximately 

9.745 million metric tonnes of 

newsprint were sold in North America. 

Newspaper publishers purchase more 

than 80 percent of the available 

newsprint supply to print newspapers. 

Some newsprint also is used in the 

production of direct mail and 

newspaper inserts. 

10. Newspaper publishers have no 

close substitutes for newsprint to use for 

printing newspapers. Newsprint is 

generally the least expensive paper 

grade. In addition, publishers’

newspaper presses are optimized for 

newsprint and cannot be modified to 

use other paper grades without 

incurring significant costs. 

11. Newsprint used for other purposes 

constitutes only a small share of total 

sales. While a small but significant 

increase in the price of newsprint may 

cause some customers for these other 

uses to switch to other grades of 

groundwood paper or otherwise reduce 

their consumption of newsprint, those 

losses would not be sufficient to make 

such a price increase unprofitable. 

12. For these reasons, demand for 

newsprint is highly inelastic with 

respect to changes in price. 

Accordingly, the production and sale of 

newsprint is a distinct line of commerce 

and a relevant product market within 

the meaning of the Clayton Act. 

2. Geographic Market: North America 

13. The relevant geographic market 

for the sale of newsprint is no smaller 

than the United States and Canada 

(‘‘North America’’). Newsprint can be 

transported within the United States 

and Canada at a sufficiently low cost 

and in such a timely and reliable 

manner that an attempt to increase price 

anticompetitively in any smaller region 

of the United States or North America 

would prove unprofitable. In the event 

of such an attempted price increase, 

customers could readily and 

economically shift their purchases to 

newsprint producers throughout North 

America. 

14. The relevant geographic market is 

no broader than North America. Foreign 

imports account for approximately two 

percent of North American newsprint 

consumption. Transportation costs of 

importing newsprint are relatively high, 

and customers are concerned about the 

reliability of foreign newsprint supply. 

Consequently, a small but significant 

increase in the price of newsprint will 

not likely cause customers to purchase 

sufficient volumes of additional 

newsprint from outside of North 

America to make such a price increase 

unprofitable. 

15. Accordingly, North America is a 

relevant geographic market within the 

meaning of the Clayton Act. 

B. Anticompetitive Effects 

16. The proposed transaction likely 

will substantially reduce competition in 

the North American newsprint market. 

Abitibi and Bowater are the two largest 

producers of newsprint in North 

America and compete directly against 

one another to produce and sell 

newsprint. Abitibi and Bowater 

currently own approximately 25 percent 

and 16 percent of capacity, respectively, 

which will result in a post-merger share 

of over 40 percent. 

17. Demand for newsprint in the 

North American market has declined 

over the last several years at a rate of 

approximately 5 to 10 percent per year 

because of a significant decline in 

demand for newspapers. As a result, 

North American newsprint producers 

have closed, idled, or converted some of 

their newsprint capacity. This decline 

in the demand for newsprint is 

projected to continue, and the resulting 

excess newsprint capacity will likely 

lead Defendants and their competitors 

to close, idle, or convert more newsprint 

mills. 

18. But for the merger, following the 

anticipated demand-based reductions in 

capacity, neither Abitibi nor Bowater 

acting alone would be of sufficient size 

to profitably increase the price of 

newsprint by reducing its own output 

through strategically closing, idling, or 

converting its capacity. 

19. The proposed transaction would 

combine Defendants’ large share of 

newsprint capacity, thereby expanding 

the quantity of newsprint sales over 

which the merged firm would benefit 

from a price increase. This would 

provide the merged firm with an 

incentive to close capacity sooner than 

it otherwise would to raise prices and 

profit from the higher margins on its 

remaining capacity. 

C. Neither Supply Responses Nor Entry 

Will Defeat an Exercise of Market Power 

20. Neither the combined firm’s North 

American competitors, nor producers 

from outside of the North American 

market, can, individually or 

collectively, increase their newsprint 

sales to North American customers to 

make a price increase by the merged 

firm unprofitable. Additionally, entry by 

a new competitor would not be timely, 

likely, or sufficient to defeat an exercise 

of market power by the merged firm. 

The merged firm will therefore have 

both the incentive and the ability to 

impose an anticompetitive price 

increase. 

21. While some North American 

newsprint competitors currently have 

some limited excess capacity, that 

capacity will be reduced by the closure 

or conversion of unprofitable newsprint 

mills or machines in response to falling 

demand for newsprint. Once this 

newsprint capacity exits the market, the 

merged firm then will be able profitably 

to exercise market power. 

22. North American newsprint 

competitors would not defeat an 

anticompetitive price increase by 

restarting their closed or idled 

newsprint capacity in response to such 

a price increase. The increased revenue 

from restarting a machine or mill would 

not outweigh the start-up costs, 

particularly in a declining market. 

23. Producers currently 

manufacturing other coated and 

uncoated grades of paper are not likely 

to switch to producing newsprint in 

response to a price increase. Declining 

demand for newsprint has caused 

several producers to invest substantial 

capital to convert machines that had 

previously been producing newsprint to 

machines that produce grades of paper 

that return higher margins. These 

producers would not find it profitable to 

switch back to newsprint to defeat an 

exercise of market power by the merged 

firm. 

24. North American newsprint 

producers currently export some of their 

newsprint. Some of these newsprint 

exports likely would be directed back to 

the North American market in response 

to a price increase. However, this 

repatriation of newsprint will be 

insufficient, even in combination with 

other competitive responses, to 

discipline an exercise of market power 

by the combined firm. Abitibi and 

Bowater collectively produce over 65 


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percent of the newsprint exported from 

North America and would have no 

incentive to repatriate such exports. In 

addition, most of the remaining exports 

by North American producers are sold 

pursuant to long-term sales 

arrangements and relationships and 

therefore are unlikely to be repatriated 

in response to a price increase in North 

America. 

25. Successful entry into the 

manufacturing and distribution of 

newsprint is difficult, time consuming, 

and costly. New entry requires investing 

hundreds of millions of dollars in 

equipment and facilities, extensive 

environmental permitting, and the 

establishment of a reliable distribution 

system and work force. Particularly 

given that demand for newsprint is 

declining in North America, a new 

entrant would not find it profitable to 

build a new newsprint mill in response 

to a price increase, and could not do so 

within two years. 

26. Accordingly, neither entry nor 

industry supply responses to a price 

increase for newsprint in North America 

will deter the likely exercise of market 

power by the combined firm. 

V. Violation Alleged 

27. The likely effect of the proposed 

merger of Abitibi and Bowater may be 

substantially to lessen competition in 

interstate trade and commerce in 

violation of section 7 of the Clayton Act, 

15 U.S.C. section 18. 

28. Unless restrained, the proposed 

transaction likely will have the 

following effects, among others: 

(a) Competition likely will be 

lessened substantially in the production 

and sale of newsprint in North America; 

(b) actual and potential competition 

between Abitibi and Bowater in the 

production and sale of newsprint in 

North America will be eliminated; and 

(c) prices charged for newsprint in 

North America likely will increase. 

VI. Requested Relief 

31. The United States requests that: 

(a) The proposed transaction be 

adjudged and decreed to be unlawful 

and in violation of Section 7 of the 

Clayton Act, 15 U.S.C. 18; 

(b) Defendants and all persons acting 

on their behalf be permanently enjoined 

and restrained from consummating the 

proposed transaction or from entering 

into or carrying out any contract, 

agreement, understanding, or plan, the 

effect of which would be to combine the 

businesses or assets of Defendants; 

(c) Plaintiff be awarded its costs for 

this action; and 

(d) Plaintiff receive such other and 

further relief as the Court may deem just 

and proper. 

Respectfully submitted. 

Deborah A. Garza (DC Bar No. 395259), 

Acting Assistant Attorney General, Antitrust 

Division. 

James J. O’Connell (DC Bar No. 464109), 

Acting Deputy Assistant Attorney General, 

Antitrust Division. 

J. Robert Kramer II, 

Director of Operations, Antitrust Division. 

Joseph Miller (DC Bar No. 439965), 

Assistant Chief, Litigation I Section, Antitrust 

Division. 

Karl D. Knutsen, Ryan Danks, Mitchell 

Glende, Seth A. Grossman, N. Christopher 

Hardee (DC Bar No. 458168), David Kelly, 

Ihan Kim, Rebecca A. Perlmutter, 

Attorneys, U.S Department of Justice, 

Antitrust Division, Litigation I Section, 1401 

H Street, NW., Suite 4000, Washington, DC 

20530, (202) 514–0976. 

Dated: October 23, 2007. 

The United States District Court for the 

District of Columbia 

United States of America, Plaintiff, v. 

Abitibi-Consolidated Inc. and Bowater 

Incorporated, Defendants; Case 

No.:llll, Judge:llll, Deck 

Type: Antitrust, Date Stamp:llll. 

Final Judgment 

Whereas, Plaintiff, United States of 

America, filed its Complaint on October 

23, 2007, and Plaintiff and Defendants, 

Abitibi-Consolidated Inc. (‘‘Abitibi’’) 

and Bowater Incorporated (‘‘Bowater’’), 

by their respective attorneys, have 

consented to the entry of this Final 

Judgment without trial or adjudication 

of any issue of fact or law, and without 

this Final Judgment constituting any 

evidence against or admission by any 

party regarding any issue of fact or law; 

And whereas, Defendants agree to be 

bound by the provisions of this Final 

Judgment pending its approval by the 

court; 

And whereas, the essence of this Final 

Judgment is the prompt and certain 

divestiture of certain rights or assets by 

Defendants to assure that competition is 

not substantially lessened; 

And whereas, the United States 

requires Defendants to make certain 

divestitures for the purpose of 

remedying the loss of competition 

alleged in the Complaint; 

And whereas, Defendants have 

represented to the United States that the 

divestitures required below can and will 

be made and that Defendants will later 

raise no claim of hardship or difficulty 

as grounds for asking the Court to 

modify any of the divestiture provisions 

contained below; 

Now therefore, before any testimony 

is taken, without trial or adjudication of 

any issue of fact or law, and upon 

consent of the parties, it is ordered, 

adjudged, and decreed: 

I. Jurisdiction 

This Court has jurisdiction over the 

subject matter of and each of the parties 

to this action. The Complaint states a 

claim upon which relief may be granted 

against Defendants under section 7 of 

the Clayton Act, 15 U.S.C. 18. 

II. Definitions 

As used in this Final Judgment: 

A. ‘‘Acquirer’’ means the entity or 

entities to whom Defendants divest 

some or all of the Divestiture Assets. 

B. ‘‘Abitibi’’ means Defendant AbitibiConsolidated Inc., a Canadian 

corporation with its headquarters in 

Montre ́al, Quebec, Canada, its 

successors and assigns, and its 

subsidiaries, divisions, groups, 

affiliates, partnerships and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

C. ‘‘Bowater’’ means Defendant 

Bowater Incorporated, a Delaware 

corporation with its headquarters in 

Greenville, South Carolina, its 

successors and assigns, and its 

subsidiaries, divisions, groups, 

affiliates, partnerships and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

D. ‘‘Newsprint’’ means the lowest 

grade of uncoated groundwood paper 

(i.e., paper manufactured from 

mechanically processed pulp), 

regardless of its basis weight. It is 

primarily used in the production of 

newspaper, but also used in some 

advertising inserts, comic books, trade 

publications, and direct mail, among 

other end-use products. 

E. ‘‘Divestiture Assets’’ means: 

(1) Abitibi’s Snowflake, Arizona 

newsprint mill, located at Spur 277 

North, Snowflake, Arizona 85937; 

(2) All tangible assets used in the mill 

listed in section II(E)(1), including all 

assets relating to research and 

development activities, manufacturing 

equipment, tooling and fixed assets, real 

property (leased or owned), personal 

property, inventory, newsprint reserves, 

office furniture, materials, supplies, 

docking facilities, on- or off-site 

warehouses or storage facilities relating 

to the mill, Apache Railway Company 

assets; all licenses, permits and 

authorizations issued by any 

governmental organization relating to 

the mill; all contracts, agreements, 

leases (including renewal rights), 

commitments, certifications, and 

understandings relating to the mill, 

including supply agreements; all 

customer lists, contracts, accounts, and 


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credit records relating to the mill; all 

interests in, and contracts relating to, 

power generation; all repair and 

performance records and all other 

records relating to the mill; and 

(3) all tangible assets used in the 

development, production, servicing, 

distribution, and sales of products 

manufactured by the mill listed in 

section II(E)(1), including but not 

limited to all contractual rights, patents, 

licenses and sublicenses, intellectual 

property, technical information, 

computer software and related 

documentation, know-how, trade 

secrets, drawings, blueprints, designs, 

design protocols, specifications for 

materials, specifications for parts and 

devices, safety procedures for the 

handling of materials and substances, 

quality assurance and control 

procedures, design tools and simulation 

capability, all manuals and technical 

information provided to the employees, 

customers, suppliers, agents or 

licensees, and all research data 

concerning historic and current research 

and development efforts relating to the 

mill, including, but not limited to 

designs of experiments, and the results 

of successful and unsuccessful designs 

and experiments. 

III. Applicability 

A. This Final Judgment applies to 

Defendants, as defined above, and all 

other persons in active concert or 

participation with Defendants who 

receive actual notice of this Final 

Judgment by personal service or 

otherwise. 

B. If, prior to complying with section 

IV and V of this Final Judgment, 

Defendants sell or otherwise dispose of 

all or substantially all of their assets that 

include the Divestiture Assets, they 

shall require, as a condition of the sale 

or other disposition, that the purchaser 

agrees to be bound by the provisions of 

this Final Judgment. Defendants need 

not obtain such an agreement from the 

Acquirer of the assets divested pursuant 

to this Final Judgment. 

IV. Divestitures 

A. Defendants are ordered and 

directed, within 120 calendar days after 

the filing of the Complaint in this 

matter, or five (5) days after notice of the 

entry of this Final Judgment by the 

Court, whichever is later, to divest the 

Divestiture Assets in a manner 

consistent with this Final Judgment to 

an Acquirer acceptable to the United 

States in its sole discretion. The United 

States, in its sole discretion, may agree 

to one or more extensions of this time 

period not to exceed sixty (60) days in 

total, and shall notify the Court in such 

circumstances. Defendants agree to use 

their best efforts to divest the 

Divestiture Assets as expeditiously as 

possible. 

B. In accomplishing the divestitures 

ordered by the Final Judgment, 

Defendants promptly shall make known, 

by usual and customary means, the 

availability of the Divestiture Assets. 

Defendants shall inform any person 

making inquiry regarding a possible 

purchase of the Divestiture Assets that 

they are being divested pursuant to this 

Final Judgment and provide that person 

with a copy of this Final Judgment. 

Unless the United States otherwise 

consents in writing, Defendants shall 

offer to furnish to all prospective 

Acquirers, subject to customary 

confidentiality assurances, all 

information and documents relating to 

the Divestiture Assets that customarily 

are provided in a due diligence process 

except such information or documents 

subject to the attorney-client or workproduct privilege. Defendants shall 

make available such information to the 

United States at the same time that such 

information is made available to any 

other person. 

C. Unless the United States otherwise 

consents in writing, Defendants shall 

provide the Acquirer and the United 

States information relating to personnel 

involved in production, operations, and 

sales at the Divestiture Assets to enable 

the Acquirer to make offers of 

employment. Defendants will not 

interfere with any negotiations by the 

Acquirer to employ any employee of the 

Divestiture Assets whose primary 

responsibility is production, operations, 

or sales at the Divestiture. 

D. Unless the United States otherwise 

consents in writing, Defendants shall 

permit prospective Acquirers of the 

Divestiture Assets to have reasonable 

access to personnel and to make 

inspections of the physical facilities of 

the Divestiture Assets; access to any and 

all environmental, zoning, and other 

permit documents and information; and 

access to any and all financial, 

operational, and other documents and 

information customarily provided as 

part of a due diligence process. 

E. Defendants shall warrant to the 

Acquirer of the Divestiture Assets that 

each asset will be operational on the 

date of sale. 

F. Defendants shall not take any 

action that will impede in any way the 

permitting, operation, or divestiture of 

the Divestiture Assets. 

G. At the option of the Acquirer, 

Defendants shall enter into a fiber 

supply contract for old newsprint (ONP) 

sufficient to meet 25% of the Acquirer’s 

needs for a period of up to three (3) 

years from the date of the divestiture. 

The terms and conditions of any such 

contract must be reasonably related to 

market conditions for old newsprint and 

the purchase price shall be set at the 

prevailing market price. 

H. At the option of the purchaser and 

upon approval by the United States, in 

its sole discretion, Defendants may enter 

into a transition services agreement 

based upon commercial terms and 

conditions. Such an agreement may not 

exceed twelve (12) months from the date 

of the Divestiture. Transition services 

may include information technology 

support, information technology 

licensing, computer operations and data 

processing support, logistics support, 

and such other services as are 

reasonably necessary to operate the 

Divestiture Assets. 

1. For the period from the date of the 

filing of the Complaint in this matter 

until one (1) year after the sale of the 

Divestiture Assets, Defendants shall 

make available and deliver to the 

Divestiture Assets within seven (7) 

business days the spare ceramic center 

roll from Abitibi’s Thorold, Ontario 

newsprint mill if: (a) the Acquirer or the 

person identified in Section V(K), 

whomever is in control of the 

Divestiture Assets at the time, 

determines that the Divestiture Assets’

PM 3 machine requires a new ceramic 

center roll and (b) the Divestiture 

Assets’ permanent spare ceramic center 

roll, which has already been ordered, 

has not been delivered. If Defendants 

become obligated to deliver the spare 

ceramic center roll, then they may 

identify a suitable alternative ceramic 

center roll and request permission from 

the United States, in its sole discretion, 

to deliver the alternative center roll to 

the Divestiture Assets in place of the 

Thorold center roll. Such permission 

must be in writing. In any event, 

Defendants must deliver the Thorold 

center roll or an approved substitute to 

the Divestiture Assets within seven (7) 

business days of being notified of the 

need for the Thorold roll. Defendants 

will no longer be obligated to provide a 

ceramic center roll to the Divestiture 

Assets if either of the ceramic center 

rolls in Thorold’s PM 6 or PM 7 

machines break before the Divestiture 

Assets require a new ceramic center roll. 

J. Defendants shall warrant to the 

Acquirer that there are no material 

defects in the environmental, zoning, or 

other permits pertaining to the 

operation of the Divestiture Assets, and 

that following the sale of the Divestiture 

Assets, Defendants will not undertake, 

directly or indirectly, any challenges to 

the environmental, zoning, or other 


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permits relating to the operation of the 

Divestiture Assets. 

K. Unless the United States otherwise 

consents in writing, any divestiture 

pursuant to section IV, or by trustee 

appointed pursuant to section V, of this 

Final Judgment, shall include the entire 

Divestiture Assets, and shall be 

accomplished in such a way as to satisfy 

the United States, in its sole discretion, 

that the Divestiture Assets can and will 

be used by the Acquirer as a viable, 

ongoing business engaged in producing, 

distributing, and selling newsprint, that 

the Divestiture Assets will remain 

viable, and that the divestiture of such 

asset will remedy the competitive harm 

alleged in the Complaint. The 

divestitures, whether pursuant to 

section IV or section V of this Final 

Judgment, 

(1) Shall be made to an Acquirer that, 

in the United States’ sole judgment, has 

the intent and capability (including the 

necessary managerial, operational, 

technical, and financial capability) to 

compete effectively in the production, 

distribution, and sale of newsprint; and 

(2) Shall be accomplished so as to 

satisfy the United States, in its sole 

discretion, that none of the terms of any 

agreement between Acquirer and 

Defendants gives Defendants the ability 

to unreasonably raise the Acquirer’s 

costs, to lower the Acquirer’s efficiency, 

or otherwise to interfere in the ability of 

the Acquirer to compete effectively in 

the production, distribution, and sale of 

newsprint. 

V. Appointment of Trustee To Effect 

Divestitures 

A. If Defendants have not divested the 

Divestiture Assets within the time 

period specified in section IV(A), 

Defendants shall notify the United 

States of that fact in writing. Upon 

application of the United States, the 

Court shall appoint a trustee selected by 

the United States and approved by the 

Court to effect the divestiture of the 

Divestiture assets. 

B. After the appointment of a trustee 

becomes effective, only the trustee shall 

have the right to sell the Divestiture 

Assets. The trustee shall have the power 

and authority to accomplish the 

divestiture to an Acquirer acceptable to 

the United States at such price and on 

such terms as are then obtainable upon 

reasonable effort by the trustee, subject 

to the provisions of section IV, V, and 

VI of this Final Judgment, and shall 

have such other powers as this Court 

deems appropriate. Subject to paragraph 

V(D) of this Final Judgment, the trustee 

may hire at the cost and expense of 

Defendants any investment bankers, 

attorneys, or other agents, who shall be 

solely accountable to the trustee, 

reasonably necessary in the trustee’s 

judgment to assist in the divestiture. 

C. Defendants shall not object to a sale 

by the trustee on any ground other than 

the trustee’s malfeasance. Any such 

objection by Defendants must be 

conveyed in writing to the United States 

and the trustee within ten (10) calendar 

days after the trustee has provided the 

notice required under section VI. 

D. The trustee shall serve at the cost 

and expense of Defendants, on such 

terms and conditions as the United 

States approves, and shall account for 

all monies derived from the sale of the 

Divestiture Assets sold by the trustee 

and all costs and expenses so incurred. 

After approval by the Court of the 

trustee’s accounting, including fees for 

its services and those of any 

professionals and agents retained by the 

trustee, all remaining money shall be 

paid to Defendants and the trust shall 

then be terminated. The compensation 

of the trustee and any professionals and 

agents retained by the trustee shall be 

reasonable in light of the value of the 

Divestiture Assets and based on a fee 

arrangement providing the trustee with 

an incentive based on the price and 

terms of the divestiture and the speed 

with which it is accomplished, but 

timeliness is paramount. 

E. Defendants shall use their best 

efforts to assist the trustee in 

accomplishing the required divestiture. 

The trustee and any consultants, 

accountants, attorneys, and other 

persons retained by the trustee shall 

have full and complete access to the 

personnel, books, records, and facilities 

of the business to be divested, and 

Defendants shall develop financial and 

other information relevant to such 

business as the trustee may reasonably 

request, subject to reasonable protection 

for trade secrets or other confidential 

research, development, or commercial 

information. Defendants shall take no 

action to interfere with or to impede the 

trustee’s accomplishment of the 

divestiture. 

F. After its appointment, the trustee 

shall file monthly reports with the 

United States and the Court setting forth 

the trustee’s efforts to accomplish the 

divestiture ordered under this Final 

Judgment. To the extent such reports 

contain information that the trustee 

deems confidential, such reports shall 

not be filed in the public docket of the 

Court. Such reports shall include the 

name, address, and telephone number of 

each person who, during the preceding 

month, made an offer to acquire, 

expressed an interest in acquiring, 

entered into negotiations to acquire, or 

was contacted or made an inquiry about 

acquiring the Divestiture Assets, and 

shall describe in detail each contact 

with any such person. The trustee shall 

maintain full records of all efforts made 

to divest the Divestiture Assets. 

G. If the trustee has not accomplished 

such divestiture within six (6) months 

after its appointment, the trustee shall 

promptly file with the Court a report 

setting forth: (1) The trustee’s efforts to 

accomplish the required divestiture; (2) 

the reasons, in the trustee’s judgment, 

why the required divestiture has not 

been accomplished; and (3) the trustee’s 

recommendations. To the extent such 

report contains information that the 

trustee deems confidential, such report 

shall not be filed in the public docket 

of the Court. The trustee shall at the 

same time furnish such report to the 

United States, who shall have the right 

to make additional recommendations 

consistent with the purpose of the trust. 

The Court thereafter shall enter such 

orders as it shall deem appropriate to 

carry out the purpose of the Final 

Judgment, which may, if necessary, 

include extending the trust and term of 

the trustee’s appointment by a period 

requested by the United States. 

VI. Notice of Proposed Divestiture 

A. Within two (2) business days 

following execution of a definitive 

divestiture agreement, Defendants or the 

trustee, whichever is then responsible 

for effecting the divestiture required 

herein, shall notify the United States of 

any proposed divestiture required by 

section IV or V of this Final Judgment. 

If the trustee is responsible, it shall 

similarly notify Defendants. The notice 

shall set forth the details of the 

proposed divestiture and list the name, 

address, and telephone number of each 

person not previously identified who 

offered or expressed an interest in or 

desire to acquire any ownership interest 

in the Divestiture Assets, together with 

full details of the same. 

B. Within fifteen (15) calendar days of 

receipt by the United States of such 

notice, the United States may request 

from Defendants, the proposed 

Acquirer, any other third party, or the 

trustee, if applicable, additional 

information concerning the proposed 

divestiture, the proposed Acquirer, and 

any other potential Acquirer. 

Defendants and the trustee shall furnish 

any additional information requested 

within fifteen (15) calendar days of the 

receipt of the request, unless the parties 

shall otherwise agree. 

C. Within thirty (30) calendar days 

after receipt of the notice, or within 


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twenty (20) calendar days after the 

United States has been provided the 

additional information requested from 

Defendants, the proposed Acquirer, any 

third party, or the trustee, whichever is 

later, the United States shall provide 

written notice to Defendants and the 

trustee, if there is one, stating whether 

or not it objects to the proposed 

divestiture. If the United States provides 

written notice that it does not object, the 

divestiture may be consummated, 

subject only to Defendant’s limited right 

to object to the sale under section V(C) 

of this Final Judgment. Absent written 

notice that the United States does not 

object to the proposed Acquirer or upon 

objection by the United States, a 

divestiture proposed under section IV or 

section V shall not be consummated. 

Upon objection by Defendants under 

paragraph V(C), a divestiture proposed 

under section V shall not be 

consummated unless approved by the 

Court. 

VII. Asset Preservation 

Until the divestiture required by this 

Final Judgment has been accomplished, 

Defendants shall take all steps necessary 

to comply with the Asset Preservation 

Stipulation and Order entered by this 

Court. Defendants shall take not action 

that would jeopardize the divestiture 

ordered by this Court. 

VIII Affidavits 

A. Within twenty (20) calendar days 

of filing of the Complaint in this matter, 

and every thirty (30) calendar days 

thereafter until divestitures have been 

completed under section VI or V, 

Defendants shall deliver to the United 

States an affidavit as to the fact and 

manner of its compliance with section 

VI or V of this Final Judgment. Each 

such affidavit shall include the name, 

address, and telephone number of each 

person who, during the preceding thirty 

days, made an offer to acquire, 

expressed an interest in acquiring, 

entered into negotiations to acquire, or 

was contacted or made an inquiry about 

acquiring, any interest in the Divestiture 

Assets, and shall describe in detail each 

contact with any such person during the 

period. Each such affidavit shall also 

include a description to the efforts 

Defendants have take to solicit buyers 

for the Divestiture Assets, and to 

provide required information to any 

prospective Acquirer, including the 

limitations, if any, on such information. 

Assuming the information set forth in 

the affidavit is true and complete, any 

objection by the United States to 

information provided by Defendants, 

including limitations on the 

information, shall be made within 

fourteen (14) calendar days of receipt of 

such affidavit. 

B.. Within twenty (20) calendar days 

of the filing of the Complaint in this 

matter, Defendants shall deliver to the 

United States an affidavit that describes 

in reasonable detail all actions 

Defendants have taken and all steps 

they have implemented on an ongoing 

basis to comply with section VII of this 

Final Judgment. Defendants shall 

deliver to the United States an affidavit 

describing any changes to the efforts 

and actions outlined in Defendants’

earlier affidavits filed pursuant to this 

section within fifteen (15) calendar days 

after the change is implemented. 

C. Defendants shall keep all records of 

all efforts made to preserve and divest 

the Divestiture Assets until one year 

after such divestiture has been 

completed. 

IX. Compliance Inspection 

A. For the purposes of determining or 

securing compliance with this Final 

Judgment, or of determining whether 

the Final Judgment should be modified 

or vacated, and subject to any legally 

recognized privilege, from time to time 

duly authorized representatives of the 

United States Department of Justice, 

including consultants and other persons 

retained by the United States, shall 

upon written request of a duly 

authorized representative of the 

Assistant Attorney General in charge of 

the Antitrust Division, and on 

reasonable notice to Defendants, be 

permitted: 

(1) Access during Defendants’ office hours 

to inspect and copy, or at the United States’s 

option, to require Defendants to provide 

electronic or hard copies of, all books, 

ledgers, accounts, records, data, and 

documents in the possession, custody, or 

control of Defendants, relating to any matters 

contained in this Final Judgment; and 

(2) To interview, either informally or on 

the record, Defendants’ officers, employees, 

or agents, who may have their individual 

counsel present, regarding such matters. The 

interviews shall be subject to the reasonable 

convenience of the interviewee and without 

restraint or interference by Defendants. 

B. Upon the written request of a duly 

authorized representative of the 

Assistant Attorney General in charge of 

the Antitrust Division, Defendants shall 

submit written reports or responses to 

written interrogatories, under oath if 

requested, relating to any of the matters 

contained in this Final Judgment as may 

be requested. 

C. No information or documents 

obtained by the means provided in this 

section shall be divulged by the United 

States to any person other than an 

authorized representative of the 

executive branch of the United States, 

except in the course of legal proceedings 

to which the United States is a party 

(including grand jury proceedings), or 

for the purpose of securing compliance 

with this Final Judgment, or as 

otherwise required by law. 

D. If, at the time information or 

documents are furnished by Defendants 

to the United States, Defendants 

represent and identify in writing the 

material in any such information or 

documents to which a claim of 

protection may be asserted under Rule 

26(c)(7) of the Federal Rules of Civil 

Procedure, and Defendants mark each 

pertinent page of such material, 

‘‘Subject to claim of protection under 

Rule 26(c)(7) of the Federal Rules of 

Civil Procedure,’’ then the United States 

shall give Defendants ten (10) calendar 

days notice prior to divulging such 

material in any legal proceeding (other 

than a grand jury proceeding). 

X. Notification of Future Transactions 

A. Unless such transaction is 

otherwise subject to the reporting and 

waiting period requirements of the HartScott-Rodino Antitrust Improvements 

Act of 1976, as amended, 15 U.S.C. 18a 

(the ‘‘HSR Act’’), Defendants shall not, 

without notifying the United States, 

directly or indirectly acquire any assets 

or any interest, including any financial, 

security, loan, equity, or management 

interest, in any of Defendants’ jointlyowned newsprint mills or machines if 

the value of such acquisition exceeds 

$2,000,000. Defendants are exempted 

from this notice provision if either (1) 

from the date of the filing of the 

Complaint in this matter, the acquisition 

accounts for less than a 5% change in 

any interest and does not change control 

in any of Defendants’ jointly-owned 

mills or machines, or (2) the acquisition 

is the direct result of an asset swap 

between one of Defendants’ jointlyowned mills or machines to another of 

Defendants’ mills or machines of the 

same character, and (3) such transaction 

is not otherwise subject to the 

requirements of the HSR Act. This 

notification requirement shall run for a 

period of ten (10) years from the entry 

of this Final Judgment. 

Provided, however, that the following 

transactions shall be exempt from the 

notice requirement: (1) Defendants 

further investing in a pre-existing 

jointly-owned mill or machine on a prorata basis with Defendants’ partner(s); 

and (2) loans (including guarantees and 

security interests on loans) for the 

following purposes, provided that they 

do not enable any distribution from the 

joint venture to Defendants or 

Defendants’ joint venture partner(s) that 


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would not have otherwise occurred: (i) 

Capital expenditures relating to preexisting jointly-owned mills or 

machines, (ii) working capital 

transactions of the same character that 

Defendants have engaged in over the 

past ten (10) years; (iii) debt repayment 

or refinancing which does not impact 

equity share or the relative effective 

return between Defendants and their 

partner(s); and (iv) mergers or 

acquisitions other than those relating to 

newsprint mills or machines. 

B. Such notification shall be provided 

to the United States in the same format 

as, and per the instructions relating to, 

the Notification and Report Form set 

forth in the Appendix to Part 803 of 

Title 16 of the Code of Federal 

Regulations as amended, except that the 

information requested in Items 5 

through 9 of the instructions must be 

provided only about newsprint, and the 

required filing fee under the HSR Act 

shall be waived. Notification shall be 

provided at least thirty (30) days prior 

to acquiring any such assets or interest, 

and shall include, beyond what may be 

required by the applicable instructions, 

the names of the principal 

representatives of the parties to the 

agreement who negotiated the 

agreement, and any management or 

strategic plans discussing the proposed 

transaction. This section shall be 

broadly construed and any ambiguity or 

uncertainty regarding the filing of notice 

under this section shall be resolved in 

favor of filing notice. 

XI. No Reacquisition 

Defendants may not reacquire any 

part of the Divestiture Assets during the 

term of this Final Judgment. 

XII. Retention of Jurisdiction 

This Court retains jurisdiction to 

enable any party to this Final Judgment 

to apply to this Court at any time for 

further orders and directions as may be 

necessary or appropriate to carry out or 

construe this Final Judgment, to modify 

any of its provisions, to enforce 

compliance, and to punish violations of 

its provisions. 

XIII. Expiration of Final Judgment 

Unless this Court grants an extension, 

this Final Judgment shall expire ten (10) 

years from the date of its entry. 

XIV. Public Interest Determination 

Entry of this Final Judgment is in the 

public interest. The parties have 

complied with the requirements of the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. 16, including making copies 

available to the public of this Final 

Judgment, the Competitive Impact 

Statement, and any comments thereon 

and the United States’s responses to 

comments. Based upon the record 

before the Court, which includes the 

Competitive Impact Statement and any 

comments and response to comments 

filed with the court, entry of this Final 

Judgment is in the public interest. 

Date:llllllll 

Court approval subject to procedures of 

the Antitrust Procedures and Penalties 

Act, 15 U.S.C. 16. 

lllllllllllllllllll

United States District Judge. 

The United States District Court for the 

District of Columbia 

United States of America, Plaintiff, v. 

Abitibi-Consolidated Inc. and Bowater 

Incorporated, Defendants; Case 

No.:llll. 

Case: 1:07–cv–01912, Assigned To: 

Collyer, Rosemary M., Assign Date: 

10/23/2007, Description: Antitrust. 

Competitive Impact Statement 

Plaintiff United States of America 

(‘‘United States’’), pursuant to section 

2(b) of the Antitrust Procedures and 

Penalties Act (‘‘APPA’’ or ‘‘Tunney 

Act’’), 15 U.S.C. 16(b)–(h), files this 

Competitive Impact Statement relating 

to the proposed Final Judgment 

submitted for entry in this civil antitrust 

proceeding. 

I. Nature and Purpose of the Proceeding 

Defendants Abitibi-Consolidated Inc. 

(‘‘Abitibi’’) and Bowater Incorporated 

(‘‘Bowater’’) entered into a merger 

agreement, dated January 29, 2007, 

pursuant to which Defendants would 

merge to create a new company, 

AbitibiBowater Inc. The United States 

filed a civil antitrust complaint on 

October 23, 2007, seeking to enjoin the 

proposed merger. The Complaint alleges 

that the likely effect of the merger 

would be to lessen competition 

substantially in the production and 

distribution of newsprint in North 

America in violation of section 7 of the 

Clayton Act, 15 U.S.C. 18. This loss of 

competition likely would result in 

higher newsprint prices in the United 

States. At the same time the Complaint 

was filed, the United States also filed an 

Asset Preservation Stipulation and 

Order (‘‘Stipulation’’) and a proposed 

Final Judgment, which are designed to 

eliminate the anticompetitive effects of 

the merger. 

Under the proposed Final Judgment, 

which is explained more fully in section 

III, Defendants are required to divest 

Abitibi’s Snowflake, Arizona, newsprint 

mill, which has approximately 375,000 

metric tonnes of newsprint 

manufacturing capacity. Until the mill 

is sold and operated under the new 

ownership, Defendants must take 

certain steps to ensure that the mill and 

its accompanying assets, as defined in 

the proposed Final Judgment (hereafter, 

the ‘‘Divestiture Assets’’), are operated 

as ongoing, economically viable, and 

competitive assets. 

The United States and Defendants 

have stipulated that the proposed Final 

Judgment may be entered after 

compliance with the APPA. Entry of the 

proposed Final Judgment would 

terminate this action, except that the 

Court would retain jurisdiction to 

construe, modify, or enforce the 

provisions of the proposed Final 

Judgment and to punish violations 

thereof. 

II. Description of the Events Giving Rise 

to the Alleged Violation 

A. Defendants and the Proposed 

Transaction 

Abitibi and Bowater both produce, 

distribute, and sell newsprint and other 

groundwood paper throughout the 

world. Defendants also produce other 

pulp and wood-related products, 

operate sawmills, and own or lease 

timberlands throughout the United 

States and Canada. 

Abitibi is a Canadian company with 

its headquarters in Montre ́al, Quebec, 

Canada. In 2006, Abitibi reported total 

sales of approximately $4.85 billion. Its 

North American newsprint sales were 

approximately $1.7 billion. Abitibi is 

the largest newsprint producer in North 

America. It owns approximately 25 

percent of North American capacity. 

Bowater is incorporated in Delaware, 

and has its headquarters in Greenville, 

South Carolina. In 2006, Bowater 

reported total sales of approximately 

$3.53 billion. Its North American 

newsprint sales were approximately 

$1.1 billion. Bowater is the second 

largest newsprint producer in North 

America. It owns approximately 16 

percent of North American capacity. 

Defendants publicly announced their 

proposed transaction on January 29, 

2007. The new company, 

AbitibiBowater Inc., will be 

headquartered in Montre ́al, Quebec, 

Canada, but it will be incorporated in 

Delaware and listed on both NYSE and 

Toronto stock exchanges. 

B. The Competitive Effects of the 

Transaction on the Newsprint Market 

1. Newsprint is the Relevant Product 

Market 

The Complaint alleges that the 

production, distribution, and sale of 

newsprint is a relevant product market 

within the meaning of section 7 of the 


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2There are two primary newsprint basis weights, 

30 pound (48.8 gsm) and 27.7 pound (45 gsm), the 

lighter of which has a higher yield. The differences 

between the two weights are not material to product 

market definition because prices for each basis 

weight track each other, newspaper publishers can 

use either weight in their presses, and newsprint 

manufacturers can produce either weight on the 

same newsprint machines without incurring 

switching costs. 

3 Defendants also produce higher-grade 

groundwood paper and would be able to recapture 

some of the revenue lost from newsprint in these 

other groundwood grades. 

4The United States did not fully investigate 

whether Mexico should be included in the North 

American market because the inclusion or 

exclusion of Mexico does not change the analysis. 

Mexico is not a significant producer of newsprint, 

it does not export significant amounts of newsprint 

to the United States, and the industry does not 

consider Mexico to be part of the North American 

market. 

5The 40 percent market share represents the 

merged firm’s newsprint capacity over which it 

would be able to profit from an anticompetitive 

price increase. This share does not include 

approximately nine percent of North American 

newsprint capacity attributable to Abitibi and 

Bowater through joint-venture relationships and a 

sales management contract. This volume is not 

relevant to the competitive effects analysis because, 

under the structure of these arrangements, 

Defendants would not be able to benefit from a 

price increase on this capacity. 

Clayton Act. Newspapers are printed on 

newsprint. Newsprint is an uncoated 

groundwood paper made by a 

mechanical pulping process without the 

use of chemical additives, such as 

bleach. Newsprint can also be made, 

partly or entirely, from recovered fiber, 

such as old newsprint and old 

magazines. Because of the production 

process and lack of additives, newsprint 

is the lowest quality and generally least 

expensive grade of groundwood paper.2

Newspaper publishers, who buy more 

than 80 percent of all newsprint sold in 

the United States, have no close 

substitutes to use for printing 

newspapers because of newsprint’s 

price and physical characteristics, such 

as its strength and opacity. In addition, 

because publishers’ newsprint presses 

are optimized to use newsprint, 

switching to another grade of paper 

would be costly. 

Newsprint used for other purposes, 

primarily the production of direct mail 

and newspaper inserts, constitutes only 

a small share of total newsprint sales. If 

newsprint prices were to increase by a 

small but significant amount, some 

customers for these other uses might 

switch to other grades of groundwood 

paper or otherwise reduce their 

consumption of newsprint. Those 

losses, however, would not be sufficient 

to make such a price increase 

unprofitable.3 For these reasons, 

demand for newsprint is highly inelastic 

to changes in price. Accordingly, the 

production, distribution, and sale of 

newsprint is a line of commerce and a 

relevant product market. 

2. Relevant Geographic Market: North 

America 

The Complaint alleges that the 

relevant geographic market is no smaller 

than the United States and Canada 

(‘‘North America’’).4 Newsprint can be 

transported within the United States 

and Canada at a sufficiently low cost 

and in such a timely and reliable 

manner that an attempt to increase price 

in any smaller region of the United 

States or North America would prove 

unprofitable. In the event of such an 

attempted price increase, customers 

could readily and economically shift 

their purchases to newsprint producers 

throughout North America. In addition, 

national newspaper buying groups, 

which account for over 70 percent of all 

newsprint purchases throughout the 

United States, create a North American 

pricing structure. Price differences 

across regions within the United States 

have been small and short-lived, as 

supply has shifted rapidly to restore 

parity marketwide. 

The Complaint also alleges that the 

relevant geographic market is no 

broader than North America. Newsprint 

mills located in Canada and the United 

States account for approximately 98 

percent of North American newsprint 

consumption. Transportation costs of 

importing newsprint are high, and 

customers are concerned about the 

reliability of foreign newsprint supply. 

Consequently, a small but significant 

increase in the price of newsprint will 

not likely cause customers to purchase 

sufficient volumes of additional 

newsprint from outside North America 

to make such a price increase 

unprofitable. Accordingly, North 

America is a relevant geographic 

market. 

3. Anticompetitive Effects of the Merger 

The Complaint alleges that the 

proposed merger likely will 

substantially reduce competition to 

supply newsprint in the United States. 

Abitibi and Bowater are the two largest 

North American newsprint producers, 

and they directly compete against one 

another to produce and sell newsprint. 

Abitibi and Bowater currently own 

approximately 25 percent and 16 

percent of North American newsprint 

capacity, respectively, which will result 

in a post-merger share of over 40 

percent.5

North American newsprint demand 

has declined over the last several years 

at a rate of approximately 5 to 10 

percent per year because of a significant 

decline in demand for newspapers. As 

a result, North American newsprint 

producers have closed or idled capacity 

and converted some of their newsprint 

machines to produce other grades of 

paper. This decline in demand for 

newsprint is projected to continue, and 

the resulting excess newsprint capacity 

likely will lead Defendants and their 

competitors to close, idle, or convert 

more newsprint mills. 

But for the merger, neither Defendant 

acting alone would be of sufficient size 

to profitably increase the price of 

newsprint by reducing its own output 

through strategically closing, idling, or 

converting its capacity. 

The combination enhances 

Defendants’ incentives to exercise 

market power because the merged firm 

will control a greater base of capacity 

over which the merged firm would 

benefit from an increase in newsprint 

prices after strategically closing, idling, 

or converting some of its capacity. 

Without Snowflake’s capacity, the 

merged firm would not be of sufficient 

size to be able to recoup the losses from 

such strategic closures through 

increases in prices on its remaining 

newsprint production. The divestiture 

of Snowflake would adequately address 

the likelihood that the proposed merger 

substantially would reduce competition 

for newsprint in the United States. 

4. Neither Supply Responses Nor Entry 

Will Defeat the Exercise of Market 

Power 

Neither the combined firm’s North 

American producers, nor competitors 

from outside of the North American 

market, can, individually or 

collectively, increase their newsprint 

sales to North American customers to 

make a price increase by the merged 

firm unprofitable. Entry by a new 

competitor would not be timely, likely, 

or sufficient to defeat an exercise of 

market power by the merged firm. The 

merged firm will therefore have both the 

incentive and the ability to impose an 

anticompetitive price increase. 

While North American newsprint 

competitors currently have some limited 

excess capacity, that capacity will be 

reduced by the closure or conversion of 

unprofitable newsprint mills or 

machines in response to falling demand 

for newsprint. Once this capacity exits 

the market, the merged firm then will be 

able profitably to exercise market 

power. 

North American newsprint 

competitors would not defeat an 

anticompetitive price increase by 

restarting their closed or idled capacity. 

The increased revenue from restarting a 

closed mill or machine would not 


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outweigh the start-up costs, particularly 

in a declining market. 

North American producers with the 

capacity to make higher-grade 

groundwood paper are not likely to 

switch production from those grades 

into newsprint production in response 

to a price increase. Declining demand 

for newsprint has caused several 

producers to invest substantial capital to 

convert newsprint machines to produce 

more profitable value-added grades of 

paper. These producers would not find 

it profitable to switch from producing 

higher grades back to newsprint to 

defeat an exercise of market power by 

the merged firm. 

Some North American producers 

export a portion of their newsprint 

capacity. Some of these newsprint 

exports likely would be directed back to 

the North American market in response 

to a price increase. However, this 

repatriation of newsprint will be 

insufficient, even in combination with 

other competitive responses, to 

discipline an exercise of market power 

by the combined firm. Abitibi and 

Bowater collectively produce 65 percent 

of North American newsprint exports, 

and would have no incentive to 

repatriate their exports to defeat a price 

increase. In addition, most of the 

remaining exports by North American 

producers are sold pursuant to longterm sales arrangements and 

relationships and, therefore, are 

unlikely to be repatriated in response to 

a price increase. 

Greenfield entry is highly unlikely. A 

new North American newsprint mill or 

machine would cost in excess of a 

hundred million dollars. Particularly 

given that demand for newsprint is 

declining in North America, a new 

entrant would not find it profitable to 

build a new newsprint mill in response 

to a price increase, and could not do so 

within two years. 

Accordingly, expansion, repatriation, 

and entry would not be timely, likely, 

or sufficient to deter an anticompetitive 

price increase by the merged firm. 

III. Explanation of the Proposed Final 

Judgment 

The proposed Final Judgment 

provides for the divestiture of Abitibi’s 

Snowflake, Arizona, newsprint mill to a 

buyer acceptable to the United States, in 

its sole discretion, to preserve 

competition for newsprint in the United 

States. Snowflake is located in 

northeastern Arizona. In 2006, 

Snowflake produced over 330,000 

metric tonnes of newsprint on two 

machines. Snowflake is one of the most 

efficient and profitable newsprint mills 

in North America. Plans to improve the 

Snowflake mill’s efficiency in coming 

years with investments in energy and 

machinery are already underway. 

Snowflake’s size and cost position 

ensure that its divestiture to a 

competitor of the merged firm will 

preserve competition in the North 

American newsprint market. 

As part of its investigation, the United 

States considered market shares, costs of 

production, the extent of industry 

excess capacity, and future reductions 

in newsprint demand in analyzing 

whether the merger would cause an 

anticompetitive increase in newsprint 

prices. As discussed in Section II.B.3, if 

Defendants were allowed to merge 

without a divestiture, the merged firm 

would be able to close its capacity 

strategically, allowing the merged firm 

to raise newsprint prices and recoup its 

lost profits on its combined output. 

Divesting Snowflake, however, will 

reduce the capacity over which the 

merged firm could profit to a level at 

which it would not have the ability to 

close capacity strategically. 

Snowflake uses 100 percent recycled 

fiber and Abitibi currently supplies the 

snowflake mill with approximately 25 

to 30 percent of its fiber requirements. 

At the option of the Acquirer, the 

proposed Final Judgment requires 

Defendants to enter into a supply 

contract for up to 25 percent of 

Snowflake’s old newsprint requirements 

at the prevailing market price for up to 

three years from the date of the 

divestiture. Similarly, at the option of 

the Acquirer, and upon the approval of 

the United States, the proposed Final 

Judgment also requires Defendants to 

provide certain transition services for 

up to twelve (12) months as part of the 

divestiture. 

In merger cases where the United 

States seeks a divestiture remedy, it 

requires completion of the divestiture 

within the shortest time period 

reasonable under the circumstances. 

Section IV of the proposed Final 

Judgment requires Defendants to 

complete the divestiture within 120 

days after the filing of the Complaint in 

this matter. The assets must be divested 

in such a way as to satisfy the United 

States in its sole discretion that the 

operations can and will be operated by 

the purchaser as a viable, ongoing 

business than can compete effectively in 

the relevant market. The United States, 

in its sole discretion, may grant one or 

more extensions of time, not to exceed 

sixty (60) calendar days in total. 

Defendants must use their best efforts to 

accomplish the divestiture as 

expeditiously as possible. 

If Defendants do not accomplish the 

divestiture within the period prescribed 

in the proposed Final Judgment, a 

trustee shall be appointed by the Court 

upon the application of the United 

States. If a trustee is appointed, the 

proposed Final Judgment provides that 

Defendants will pay all costs and 

expenses of the trustee. The trustee’s 

commission will be structured so as to 

provide an incentive for the trustee 

based on the price obtained and the 

speed with which the divestiture is 

accomplished. After his or her 

appointment becomes effective, the 

trustee will file monthly reports with 

the Court and the United States setting 

forth his or her efforts to accomplish the 

divestiture. If the divestiture has not 

been accomplished at the end of the six 

months, the trustee and the United 

States will make recommendations to 

the Court, which shall enter such orders 

as appropriate in order to carry out the 

purpose of the trust, including 

extending the trust or the term of the 

trustee’s appointment. 

Finally, the proposed Final Judgment 

sets forth the process for and the 

circumstances when Defendants must 

notify the United States of the 

acquisition of any mill or machine or 

any interest in a mill or machine, if the 

value of such exceeds $2,000,000, that 

is currently jointly-owned by either 

Abitibi or Bowater with any third party. 

This notification requirement applies to 

certain transactions not otherwise 

subject to the reporting and waiting 

period requirements under the HartScott-Rodino Antitrust Improvements 

Act of 1976 and runs for ten years from 

entry of the Final Judgment. The 

provision is intended to ensure that any 

such acquisition does not undermine 

the benefits that the divestiture of the 

Snowflake mill will bring to the market. 

IV. Remedies Available to Potential 

Private Litigants 

Section 4 of the Clayton Act, 15 

U.S.C. 15, provides that any person who 

has been injured as a result of conduct 

prohibited by the antitrust laws may 

bring suit in federal court to recover 

three times the damages the person has 

suffered, as well as costs and reasonable 

attorneys’ fees. Entry of the proposed 

Final Judgment will neither impair nor 

assist the bringing of any private 

antitrust damage action. Under the 

provisions of section 5(a) of the Clayton 

Act, 15 U.S.C. 16(a), the proposed Final 

Judgment has no prima facie effect in 

any subsequent private lawsuit that may 

be brought against the defendants. 


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63196 Federal Register / Vol. 72, No. 216 / Thursday, November 8, 2007 / Notices 

6The 2004 amendments substituted ‘‘shall’’ for 

‘‘may’’ in directing relevant factors for court to 

consider and amended the list of factors to focus on 

competitive considerations and to address 

potentially ambiguous judgment terms. Compare 15 

U.S.C. 16(e)(2004), with 15 U.S.C. 16(e)(1)(2006). 

7Cf. BNS, 858 F.2d at 464 (holding that the court’s 

‘‘ultimate authority under the [APPA] is limited to 

approving or disapproving the consent decree’’); 

United States v. Gillette Co., 406 F. Supp. 713, 716 

(D. Mass. 1975) (noting that, in this way, the court 

is constrained to ‘‘look at the overall picture not 

hypercritically, nor with a microscope, but with an 

artist’s reducing glass’’). See generally Microsoft, 56 

F.3d at 1461 (discussing whether ‘‘the remedies 

[obtained in the decree are] so inconsonant with the 

allegations charged as to fall outside of the ‘reaches 

of the public interest’ ’’). 

V. Procedures Available For 

Modification of the Proposed Final 

Judgment 

The United States and Defendants 

have stipulated that the proposed Final 

Judgment may be entered by the Court 

after compliance with the provisions of 

the APPA, provided that the United 

States has not withdrawn its consent. 

The APPA conditions entry upon the 

Court’s determination that the proposed 

Final Judgment is in the public interest. 

The APPA provides a period of at 

least sixty (60) days preceding the 

effective date of the proposed Final 

Judgment within which any person may 

submit to the United States written 

comments regarding the proposed Final 

Judgment. Any person who wishes to 

comment should do so within sixty days 

of the date of publication of this 

Competitive Impact Statement in the 

Federal Register. All comments 

received during this period will be 

considered by the Department of Justice, 

which remains free to withdraw its 

consent to the proposed Final Judgment 

at any time prior to the Court’s entry of 

judgment. The comments and the 

response of the United States will be 

filed with the Court and published in 

the Federal Register. 

Written comments should be 

submitted to: Joseph Miller, Assistant 

Chief, Litigation I Section, 1401 H St. 

NW., Suite 4000, Antitrust Division, 

United States Department of Justice, 

Washington, DC 20530. 

The proposed Final Judgment 

provides that the Court retains 

jurisdiction over this action, and the 

parties may apply to the Court for any 

order necessary or appropriate for the 

modification, interpretation, or 

enforcement of the Final Judgment. 

VI. Alternatives to the Proposed Final 

Judgment 

The United States considered, as an 

alternative to the proposed final 

Judgment, a full trial on the merits 

against Defendants. The United States 

could have continued the investigation 

and sought preliminary and permanent 

injunctions against Abitibi and 

Bowater’s proposed merger. the United 

States is satisfied, however, that the 

divestiture of assets described in the 

proposed Final Judgment will preserve 

competition in the market identified by 

the United States and that such a 

remedy would achieve all or 

substantially all of the relief the United 

States would have obtained through 

litigation, but avoids the time, 

uncertainty, and expense of a trial. 

In developing this relief, the United 

States considered a number of 

divestiture alternatives and determined 

that the divestiture of the Snowflake 

mill, under the circumstances, was the 

best solution given the size and 

efficiency of the Snowflake mill. The 

analysis conducted by the United States 

indicates that the Snowflake mill is 

among the largest and most profitable 

mills in the United States. The location 

of the mill to be divested is not 

competitively significant because the 

evidence does not support the 

conclusion that the relevant geographic 

market is narrower than North America. 

VII. Standard of Review Under the 

APPA for the Proposed Final Judgment 

The Clayton Act, as amended by the 

APPA, requires that proposed consent 

judgments in antitrust cases brought by 

the United States be subject to a sixtyday comment period, after which the 

Court shall determine whether entry of 

the proposed Final Judgment ‘‘is in the 

public interest.’’ 15 U.S.C. 16(e)(1). In 

making that determination, the court, in 

accordance with the statute as amended 

in 2004, is required to consider: 

(A) The competitive impact of such 

judgment, including termination of alleged 

violations, provisions for enforcement and 

modification, duration of relief sought, 

anticipated effects of alternative remedies 

actually considered, whether its terms are 

ambiguous, and any other competitive 

considerations bearing upon the adequacy of 

such judgment that the court deems 

necessary to a determination of whether the 

consent judgment is in the public interest; 

and 

(B) The impact of entry of such judgment 

upon competition in the relevant market or 

markets, upon the public generally and 

individuals alleging specific injury from the 

violations set forth in the complaint 

including consideration of the public benefit, 

if any, to be derived from a determination of 

the issues at trial. 

15 U.S.C. 16(e)(1)(A)–(B); see generally 

United States v. SBC Commc’ns, Inc., 

489 F. Supp. 2d 1, 11 (D.D.C. 

2007)(concluding that the 2004 

amendments ‘‘effected minimal 

changes’’ to scope of review under 

Tunney Act, leaving review ‘‘sharply 

proscribed by precedent and the nature 

of Tunney Act proceedings’’).6

As the United States Court of Appeals 

for the District of Columbia Circuit has 

held, under the APPA a court considers, 

among other things, the relationship 

between the remedy secured and the 

specific allegations set forth in the 

government’s complaint, whether the 

decree is sufficiently clear, whether 

enforcement mechanisms are sufficient, 

and whether the decree may positively 

harm third parties. See United States v. 

Microsoft Corp., 56 F.3d 1448, 1458–62 

(D.C. Cir. 1995). With respect to the 

adequacy of the relief secured by the 

decree, a court may not ‘‘engage in an 

unrestricted evaluation of what relief 

would best serve the public.’’ United 

States v. BNS, Inc., 858 F.2d 456, 462 

(9th Cir. 1988) (citing United States v. 

Bechtel Corp., 648 F.2d 660 (9th Cir. 

1981)); see also Microsoft, 56 F.3d at 

1460–62. Courts have held that: 

[t]he balancing of competing social and 

political interest affected by a proposed 

antitrust consent decree must be left, in the 

first instance, to the discretion of the 

Attorney General. The court’s role in 

protecting the public interest is one of 

insuring that the government has not 

breached its duty to the public in consenting 

to the decree. The court is required to 

determine not whether a particular decree is 

the one that will best serve society, but 

whether the settlement is ‘‘within the reaches 

of the public interest.’’ More elaborate 

requirements might undermine the 

effectiveness of antitrust enforcement by 

consent decree. 

Bechtel, 648 F.2d at 666 (emphasis 

added) (citations omitted).7 In making 

its public interest determination, a 

district court ‘‘must accord deference to 

the government’s predictions about the 

efficacy of its remedies, and may not 

require that the remedies perfectly 

match the alleged violations because 

this may only reflect underlying 

weakness in the government’s case or 

concessions made during negotiation.’’

SBC Commc’ns, 489 F. Supp. 2d at 17; 

see also Microsoft, 56 F.3d at 1461 

(‘‘noting the need for courts to be 

deferential to the government’s 

predictions as to the effect of the 

proposed remedies’’); United States v. 

Archer-Daniels-Midland Co., 272 F. 

Supp. 2d 1, 6 (D.D.C. 2003) (noting that 

the court should grant due respect to the 

United States’ prediction as to the effort 

of proposed remedies, its perception of 

the market structure, and its views of 

the nature of the case). 

Court approval of a consent decree 

requires a standard more flexible and 

less strict than that appropriate to court 

adoption of a litigated decree following 


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Federal Register / Vol. 72, No. 216 / Thursday, November 8, 2007 / Notices 63197 

8See United States v. Enova Corp., 107 F. Supp. 

2d 10, 17 (D.D.C. 2000) (noting that the ‘‘Tunney 

Act expressly allows the court to make its public 

interest determination on the basis of the 

competitive impact statement and response to 

comments alone’’); S. Rep. No. 93–298, 93d Cong., 

1st Sess., at 6 (1973) (‘‘Where the public interest can 

be meaningfully evaluated simply on the basis of 

briefs and oral arguments, that is the approach that 

should be utilized.’’); United States v. Mid-Am. 

Dairymen, Inc., 1977–1 Trade Cas. (CCH) ¶ 61,508, 

at 71,980 (W.D. Mo. 1977) (‘‘Absent a showing of 

corrupt failure of the government to discharge its 

duty, the Court, in making its public interest 

finding, should . . carefully consider the 

explanations of the government in the competitive 

impact statement and its responses to comments in 

order to determine whether those explanations are 

reasonable under the circumstances.’’). 

a finding of liability. ‘‘[A] proposed 

decree must be approved even if it falls 

short of the remedy the court would 

impose on its own, as long as it falls 

within the range of acceptability or is 

‘‘within the reaches of public interest.’’

United States v. Am. Tel. & Tel. Co., 552 

F. Supp. 131, 151 (D.D.C. 

1982)(citations omitted) (quoting United 

States v. Gillette Co., 406 F. Supp. 713, 

716 (D. Mass. 1975)), aff’d sub nom. 

Maryland v. United States, 460 U.S. 

1001 (1983); see also United States v. 

Alcan Aluminum Ltd., 605 F. Supp. 619, 

622 (W.D. Ky. 1985) (approving the 

consent decree even though the court 

would have imposed a greater remedy). 

To meet this standard, the United States 

‘‘need only provide a factual basis for 

concluding that the settlements are 

reasonably adequate remedies for the 

alleged harms.’’ SBC Commc’ns, 489 F. 

Supp. 2d at 17. 

Moreover, the Court’s role under the 

APPA is limited to reviewing the 

remedy in relationship to the violations 

that the United States has alleged in its 

Complaint, and does not authorize the 

Court to ‘‘construct [its] own 

hypothetical case and then evaluate the 

decree against that case.’’ Microsoft, 56 

F.3d at 1459. Because the ‘‘court’s 

authority to review the decree depends 

entirely on the government’s exercising 

its prosecutorial discretion by bringing 

a case in the first place,’’ it follows that 

‘‘the court is only authorized to review 

the decree itself,’’ and not to ‘‘effectively 

redraft the complaint’’ to inquire into 

other matters that the United States did 

not pursue. Id. at 1459–60. As this Court 

recently confirmed in SBC Commc’ns, 

courts ‘‘cannot look beyond the 

complaint in making the public interest 

determination unless the complaint is 

drafted so narrowly as to make a 

mockery of judicial power.’’ SBC 

Commc’ns, 489 F. Supp. 2d at 15. 

In its 2004 amendments, Congress 

made clear its intent to preserve the 

practical benefits of utilizing consent 

decrees in antitrust enforcement, adding 

the unambiguous instruction ‘‘[n]othing 

in this section shall be construed to 

require the court to conduct an 

evidentiary hearing or to require the 

court to permit anyone to intervene.’’ 15 

U.S.C. 16(e)(2). The language wrote into 

the statute what the Congress that 

enacted the Tunney Act in 1974 

intended, as Senator Tunney then 

explained: ‘‘[t]he court is nowhere 

compelled to go to trial or to engage in 

extended proceedings which might have 

the effect of vitiating the benefits of 

prompt and less costly settlement 

through the consent decree process.’’

119 Cong. Rec. 24,598 (1973) (statement 

of Senator Tunney). Rather, the 

procedure for the public interest 

determination is left to the discretion of 

the court, with the recognition that the 

court’s ‘‘scope of review remains 

sharply proscribed by precedent and the 

nature of Tunney Act proceedings.’’

SBC Commc’ns, 489 F. Supp. 2d at 11.8

VIII. Determinative Documents 

There are no determinative materials 

or documents within the meaning of the 

APPA that were considered by the 

United States in formulating the 

proposed Final Judgment. 

Dated: October 23, 2007. 

Respectfully submitted, 

Karl D. Knutsen, Ryan Danks, Mitchell 

Glende, Seth A. Grossman, N. Christopher 

Hardee (DC Bar No. 458168), David Kelly, 

Ihan Kim, Rebecca A. Perlmutter, 

Attorneys, U.S. Department of Justice, 

Antitrust Division, Litigation I Section, 1401 

H Street, NW., Suite 4000, Washington, DC 

20530, (202) 514–0976. 

[FR Doc. 07–5586 Filed 11–07–07; 8:45 am] 

BILLING CODE 4410–11–M 

DEPARTMENT OF LABOR 

Bureau of International Labor Affairs, 

Request for Information on Efforts by 

Certain Countries To Eliminate the 

Worst Forms of Child Labor 

AGENCY: The Bureau of International 

Labor Affairs, United States Department 

of Labor. 

ACTION: Request for information on 

efforts by certain countries to eliminate 

the worst forms of child labor. 

SUMMARY: This notice is a request for 

information for use by the Department 

of Labor in preparation of an annual 

report on certain trade beneficiary 

countries’ implementation of 

international commitments to eliminate 

the worst forms of child labor. This will 

be the seventh such report by the 

Department of Labor under the Trade 

and Development Act of 2000 (TDA). 

DATES: Submitters of information are 

requested to provide two (2) copies of 

their written submission to the Office of 

Child Labor, Forced Labor and Human 

Trafficking at the address below by 5 

p.m., December 7, 2007. 

ADDRESSES: Written submissions should 

be addressed to Tina McCarter at the 

Office of Child Labor, Forced Labor and 

Human Trafficking, Bureau of 

International Labor Affairs, U.S. 

Department of Labor, 200 Constitution 

Avenue, NW., Room S–5317, 

Washington, DC 20210 or may be sent 

via e-mail to mccarter.tina@dol.gov. 

FOR FURTHER INFORMATION CONTACT: Tina 

McCarter or Charita Castro, Bureau of 

International Labor Affairs, Office of 

Child Labor, Forced Labor and Human 

Trafficking, at (202) 693–4843, fax: (202) 

693–4830, or via e-mail to mccartertina@dol.gov or castro.charita@dol.gov. 

The Department of Labor’s international 

child labor reports can be found on the 

Internet at http://www.dol.gov/ILAB/ 

media/reports/iclp/main.htm or can be 

obtained from the Office of Child Labor, 

Forced Labor and Human Trafficking. 

SUPPLEMENTARY INFORMATION: The Trade 

and Development Act of 2000 [Pub. L. 

106–200] established a new eligibility 

criterion for receipt of trade benefits 

under the Generalized System of 

Preferences (GSP), Caribbean Basin 

Trade and Partnership Act (CBTPA), 

and Africa Growth and Opportunity Act 

(AGOA). The TDA amends the GSP 

reporting requirements of the Trade Act 

of 1974 (Section 504) [19 U.S.C. 2464] 

to require that the President’s annual 

report on the status of internationally 

recognized worker rights include 

‘‘findings by the Secretary of Labor with 

respect to the beneficiary country’s 

implementation of its international 

commitments to eliminate the worst 

forms of child labor.’’ Title II of the TDA 

and the TDA Conference Report [Joint 

Explanatory Statement of the Committee 

of Conference, 106th Cong.2d.sess. 

(2000)] indicate that the same criterion 

applies for the receipt of benefits under 

CBTPA and AGOA, respectively. 

In addition, the Andean Trade 

Preference Act (ATPA) as amended and 

expanded by the Andean Trade 

Promotion and Drug Eradication Act 

(ATPDEA) (Pub. L. 107–210, Title XXXI) 

includes as a criterion for receiving 

benefits ‘‘[w]hether the country has 

implemented its commitments to 

eliminate the worst forms of child labor 

as defined in section 507(6) of the Trade 

Act of 1974.’’

Scope of Report 

Countries and non-independent 

countries and territories presently 


rwilkins on PROD1PC63 with NOTICES