UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q
(Mark One)

 [X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1997
                                       OR

         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from                to

Commission file number              1-8712

                              BOWATER INCORPORATED
             (Exact name of registrant as specified in its charter)

                        Delaware                    62-0721803
           (State or other jurisdiction of       (I.R.S. Employer
               incorporation or organization)   Identification No.)

        55 East Camperdown Way, P.O. Box 1028, Greenville, SC 29602
          (Address of principal executive offices)     (Zip Code)

                                 (864) 271-7733
              (Registrant's telephone number, including area code)

      (Former name, former address and former fiscal year, if changed since
                                 last report.)

   Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

          APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                        DURING THE PRECEDING FIVE YEARS:

   Indicate by check mark whether the registrant has filed all documents and 
reports required to be filed by Sections 12, 13 or 15(d) of the Securities 
Exchange Act of 1934 subsequent to the distribution of securities under a plan 
confirmed by a court.  Yes      No

                      APPLICABLE ONLY TO CORPORATE ISSUERS

   Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of May 8, 1997.

             Class                              Outstanding at May 8, 1997

       Common Stock, $1.00 Par Value                 39,883,271 Shares

<PAGE>


                              BOWATER INCORPORATED

                                    I N D E X



                                                                          Page
                                                                         Number


  PART I   FINANCIAL INFORMATION

         1.  Financial Statements:

                  Consolidated Balance Sheet at March 31, 1997,
                  and December 31, 1996                                    3

                  Consolidated Statement of Operations for the
                  Three Months Ended March 31, 1997, and
                  March 31, 1996                                           4

                  Consolidated Statement of Capital Accounts
                  for the Three Months Ended March 31, 1997                5

                  Consolidated Statement of Cash Flows for the
                  Three Months Ended March 31, 1997, and March
                  31, 1996                                                 6

                  Notes to Consolidated Financial Statements               7-8

            2.  Management's Discussion and Analysis of
                 Financial Condition and Results of Operations             9-12


  PART II   OTHER INFORMATION

            6.  Exhibits and Reports on Form 8-K                          13

  SIGNATURES                                                              14














                                       (2)

<PAGE>


PART I
                                   BOWATER INCORPORATED AND SUBSIDIARIES
                                         CONSOLIDATED BALANCE SHEET
                                         (Unaudited, in thousands)
<TABLE>
<CAPTION>
<S>                                                  <C>                      <C>




                                                          March 31,           December 31,
                                                             1997                 1996
                                                        ---------------      --------------
                          ASSETS
Current assets:
  Cash and cash equivalents                              $     111,670       $       85,259
  Marketable securities                                        238,746              345,398
  Accounts receivable, net                                     173,067              185,724
  Inventories (Note 2)                                         117,191              123,745
  Other current assets                                          13,774               13,629
                                                        ---------------       --------------
    Total current assets                                       654,448              753,755
                                                        ---------------       --------------

Timber and timberlands                                         394,237              395,675
Fixed assets, net                                            1,608,636            1,636,705
Other assets                                                    79,476               79,409
                                                        ===============       ==============
                                                         $   2,736,797       $    2,865,544
                                                        ===============       ==============
                 LIABILITIES AND CAPITAL
Current liabilities:
  Current installments of long-term debt                 $       1,604       $        1,604
  Accounts payable and accrued liabilities (Note 3)            177,131              216,328
  Income taxes payable                                          16,062                6,057
  Dividends payable (Note 4)                                     8,824               29,892
                                                        ---------------       --------------
    Total current liabilities                                  203,621              253,881
                                                        ---------------       --------------

Long-term debt, net of current installments                    758,604              759,029
Other long-term liabilities                                    166,675              171,651
Deferred income taxes                                          345,762              358,858
Minority interests in subsidiaries                             124,982              126,246
Commitments and contingencies (Note 5)
Redeemable LIBOR preferred stock                                24,894               24,746

Shareholders' equity:
   Series C cumulative preferred stock                          25,465               25,465
   Common stock (Note 6)                                        44,226               43,994
   Additional paid-in capital                                  539,136              531,598
   Retained earnings                                           689,018              698,301
   Equity adjustments                                          (12,960)             (12,370)
   Loan to ESOT                                                 (5,884)              (6,324)
   Treasury stock, at cost (Note 7)                           (166,742)            (109,531)
                                                        ---------------       --------------
    Total shareholders' equity                               1,112,259            1,171,133
                                                        ===============       ==============
                                                         $   2,736,797        $   2,865,544
                                                        ===============       ==============
</TABLE>




          See accompanying notes to consolidated financial statements.
                                       (3)


<PAGE>

                      BOWATER INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
               (Unaudited, in thousands except per share amounts)
<TABLE>
<CAPTION>
<S>                                                             <C>                <C> 




                                                                           Three Months Ended
                                                                  --------------------------------
                                                                    March 31,         March 31,
                                                                      1997              1996
                                                                  --------------    --------------
Net sales                                                          $    348,507      $    468,883
Cost of sales                                                           280,514           260,006
Depreciation, amortization and cost of timber harvested                  42,649            45,205
                                                                  --------------    --------------
    Gross profit                                                         25,344           163,672
Selling and administrative expense                                       15,221            20,951
                                                                  --------------    --------------
    Operating income                                                     10,123           142,721

Other expense/(income):
  Interest income                                                        (5,293)           (4,852)
  Interest expense, net of capitalized interest                          16,818            18,347
  Gain on sale of timberlands (Note 8)                                      (11)          (74,863)
  Other, net                                                                275              (434)
                                                                  --------------    --------------
                                                                         11,789           (61,802)
                                                                  --------------    --------------

Income/(loss) before income taxes and minority interests                 (1,666)          204,523

Provision for income taxes (Note 9)                                        (617)           75,674
Minority interests in net income of subsidiaries                           (735)           15,944
                                                                  --------------    --------------

Net income/(loss)                                                  $       (314)     $    112,905
                                                                  ==============    ==============

Earnings/(loss) per common share - primary (Note 10):              $      (0.03)     $       2.59
                                                                  ==============    ==============

Average common and common equivalent shares outstanding                  40,278            43,208
                                                                  ==============    ==============

Earnings/(loss) per common share - fully diluted (Note 10):        $      (0.03)     $       2.53
                                                                  ==============    ==============

Average common and common equivalent shares outstanding                  40,278            44,089
                                                                  ==============    ==============
</TABLE>


          See accompanying notes to consolidated financial statements.
                                       (4)


<PAGE>
                     BOWATER INCORPORATED AND SUBSIDIARIES
                   CONSOLIDATED STATEMENT OF CAPITAL ACCOUNTS
                       Three Months Ended March 31, 1997
               (Unaudited, in thousands except per share amounts)

<TABLE>
<CAPTION>
<S>                                        <C>         <C>          <C>      <C>         <C>      <C>         <C>       <C>

                                            Redeemable  Series C  
                                             LIBOR     Cumulative            Additional 
                                            Preferred  Preferred    Common    Paid-in    Retained    Equity    Loan to   Treasury   
                                              Stock      Stock       Stock    Capital    Earnings  Adjustments ESOT      Stock
                                           ----------------------------------------------------------------------------------------
Balance at December 31, 1996                 $24,746    $25,465     $43,994   $531,598   $698,301  $(12,370)  $ (6,324)$(109,531)

Net loss                                        -          -          -          -            (314)        -          -        -

Dividends on common stock ($.20 per share)      -          -          -          -          (7,966)        -          -        -

Dividends on preferred stock:

  LIBOR ($0.60 per share)                       -          -          -          -            (300)        -          -        -   

  Series C ($2.10 per share)                    -          -          -          -            (555)        -          -        -

Increase in stated value of LIBOR
  preferred stock                                148       -          -          -            (148)        -          -        -

Common stock issued for exercise 
  of stock options                              -          -           232       6,326         -           -          -        -

Tax benefit on exercise of stock options                                         1,161 

Reduction in loan to ESOT                       -          -          -          -             -           -          440      -

Purchase of common stock (Note 7)               -          -          -          -             -           -          -     (57,244)

Treasury stock used for employee benefit
  and dividend reinvestment plans               -          -          -            51          -           -          -        33

Foreign currency translation                    -          -          -          -             -         (590)        -        -
                                            ----------------------------------------------------------------------------------------
Balance at March 31, 1997                   $24,894    $25,465     $44,226     $539,136    $689,018  $(12,960)   $(5,884) $(166,742)
                                            ========================================================================================
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       (5)


<PAGE>


                      BOWATER INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                            (Unaudited, in thousands)

<TABLE>
<CAPTION>
<S>                                                                    <C>                 <C>


                                                                                Three Months Ended
                                                                        -----------------------------------
                                                                          March 31,            March 31,
                                                                            1997                 1996
                                                                        --------------       --------------
Cash flows from (used for) operating activities:
Net income/(loss)                                                        $     (314)          $    112,905
Adjustments to reconcile net income to net cash
  provided by operating activities:
Depreciation, amortization and cost of timber harvested                      42,649                 45,205
Deferred income taxes                                                          (184)                22,039
Minority interests                                                             (735)                15,944
Gain from sale of timberlands (Note 8)                                          (11)               (74,863)
Change in working capital:
  Accounts receivable, net                                                   12,657                 29,698
  Inventories                                                                 6,554                (39,380)
  Accounts payable and accrued liabilities (Note 3)                         (35,016)                (6,456)
  Income taxes payable                                                       (1,630)               (33,284)
Other, net                                                                     (967)                 6,659
                                                                        --------------       --------------
          Net cash from operating activities                                 23,003                 78,467
                                                                        --------------       --------------
                                                                         
Cash flows from (used for) investing activities:
Cash invested in fixed assets, timber and timberlands                       (23,572)               (14,404)
Disposition of fixed assets, timber and timberlands (Note 8)                    857                113,714
Maturities of marketable securities - net                                   106,652                    -
                                                                        --------------       --------------
          Net cash from investing activities                                 83,937                 99,310
                                                                        --------------       --------------

Cash flows from (used for) financing activities:
Cash dividends, including minority interests                                (29,840)               (38,249)
Purchase of common stock (Note 7)                                           (57,244)               (63,638)
Payments of long-term debt                                                     (443)                (1,419)
Stock options exercised                                                       6,558                  6,251
Other                                                                           440                    420
                                                                        --------------       --------------
          Net cash (used for) financing activities                          (80,529)               (96,635)
                                                                        --------------       --------------

Net increase in cash and cash equivalents                                    26,411                 81,142

Cash and cash equivalents at beginning of year                               85,259                264,571
                                                                        --------------       --------------
Cash and cash equivalents at end of period                               $  111,670           $    345,713
                                                                        ==============       ==============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
  Interest, net of capitalized interest                                  $  (12,711)          $    (15,508)
  Income taxes                                                           $   (1,197)          $    (86,919)
</TABLE>


          See accompanying notes to consolidated financial statements.
                                       (6)

<PAGE>




                      BOWATER INCORPORATED AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

1.   The accompanying consolidated financial statements include the accounts of
     Bowater Incorporated and Subsidiaries (the Company). The consolidated
     balance sheets, statements of operations, capital accounts and cash flows
     are unaudited. However, in the opinion of Company management, all
     adjustments (consisting of normal recurring adjustments) necessary for fair
     presentation of the interim financial statements have been made. The
     results of the interim period ended March 31, 1997, are not necessarily
     indicative of the results to be expected for the full year.


2.    The composition of inventories at March 31, 1997, and December 31, 1996, 
      was as follows (in thousands):


                                       March 31, 1997      December 31, 1996
                                     -----------------    -------------------
      (Unaudited) 
      At lower of cost or market:
      Raw materials                    $   20,010            $   17,990
      Work in process                       2,726                 3,077
      Finished goods                       40,430                47,577
      Mill stores and other supplies       65,849                66,925
                                       --------------        ------------- 
                                          129,015               135,569
                                       --------------        -------------
      Excess of current cost over 
         LIFO inventory value             (11,824)              (11,824)
                                       --------------        -------------
                                       $  117,191            $  123,745
                                       ==============        =============
     
     

3.   During the first quarter of 1997, the Company paid $19.9 million of the
     $25.9 million accrued for an incentive compensation plan established in
     1994. The remainder was paid in the second quarter of 1997.

4.   In December 1996, the Board of Directors of Calhoun Newsprint Company (CNC)
     declared a $40.0 million dividend. As a result, $19.6 million was paid to
     the minority shareholder in January 1997. In the first quarter of 1996, a
     $29.4 million dividend was paid to the minority shareholder.

5.   The Company is involved in various legal proceedings relating to contracts,
     commercial disputes, taxes, environmental issues, employment and workers'
     compensation claims, and other matters. The Company's management believes
     that the ultimate disposition of these matters will not have a material
     adverse effect on the Company's operations or its financial condition taken
     as a whole.

6.   On January 9, 1997, the Company converted all of the outstanding depositary
     shares of its 7% PRIDES Series B Convertible Preferred Stock using Bowater
     common stock at a conversion ratio of .82 of a common share for each
     depositary share, resulting in the issuance of 4,012,765 common shares. The
     Company reflected this transaction in the Consolidated Balance Sheet at
     December 31, 1996.

7.   During the first quarter of 1997, the Company purchased 1.4 million shares
     of common stock at a cost of $57.2 million, completing the stock repurchase
     program authorized in February 1996. In the first quarter of 1996, 1.6
     million shares were purchased at a cost of $63.6 million. Since the
     beginning of the program, 4.0 million shares were purchased at a total cost
     of $156.0 million.

                                       (7)
<PAGE>


                      BOWATER INCORPORATED AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


8.   During the first quarter of 1996, the Company sold approximately 104,000
     acres of timberlands in Alabama and South Carolina resulting in proceeds of
     $113.7 million and a pre-tax gain of $74.9 million or $.84 per fully
     diluted share.

9.    The effective tax rate for the first quarter of 1997 and the first 
      quarter of 1996 was 37.0 percent.

10.  The calculation of earnings per share for the quarters ended March 31,
     1997, and March 31, 1996, includes a deduction of $1.0 million and $1.2
     million, respectively, for the dividend requirements of the Company's LIBOR
     and Series C preferred stocks and the amortization of the difference
     between the net proceeds from the LIBOR preferred stock and its mandatory
     redemption value.










                                       (8)
<PAGE>


                      BOWATER INCORPORATED AND SUBSIDIARIES

                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations

Summary

         For the first quarter of 1997, the Company incurred a net loss of $0.3
million, or $.03 per fully diluted share, compared to net income of $112.9
million, or $2.53 per fully diluted share in the first quarter of 1996. Included
in net income for the first quarter of 1996 was a $37.0 million after-tax gain,
or $.84 per fully diluted share, on the sale of timberlands. First quarter 1997
net sales were $348.5 million, compared with $468.9 million for the comparable
quarter of 1996.


PRODUCT LINE INFORMATION:
(Unaudited, $ in thousands)


                                                     Quarter Ended
                                            ------------------------------
                                               March 31,      March 31, 
                                                 1997            1996 
                                            ------------------------------
Net sales: 
  Newsprint                                 $ 167,111       $ 235,683
  Coated groundwood                            73,315          98,755
  Directory paper                              49,616          49,052
  Market pulp                                  44,185          18,576
  Uncoated groundwood specialities             11,520          10,731
  Lumber and other wood products               33,958          28,382
  Communication papers (1)                       -             50,973
  Distribution costs                          (31,198)        (23,269)
                                            -----------     ------------
                                            $ 348,507       $ 468,883
                                            ===========     ============
Operating income                            $  10,123       $ 142,721  

(1) The Communication Papers Division was sold in November 1996.






                                       (9)

<PAGE>


                      BOWATER INCORPORATED AND SUBSIDIARIES

                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations
            Three Months Ended March 31, 1997, versus March 31, 1996

         For the first quarter of 1997, the Company's operating income of $10.1
million decreased $132.6 million compared to the first quarter of 1996. For the
majority of the Company's products, lower average transaction prices, partially
offset by higher tonnage shipments, caused operating income to decline
significantly.

                            Product Line Information

         Although all Company operations are grouped in a single segment, market
and operating trends are discussed by major product. In general, the Company's
products are globally traded commodities. Pricing and the level of shipments of
these products will continue to be influenced by the balance between supply and
demand as affected by global economic conditions, changes in consumption and
capacity, the level of customer and producer inventories as well as fluctuations
in exchange rates.

NEWSPRINT Average transaction prices for newsprint decreased 33 percent in the
first quarter of 1997 compared to the same period last year and decreased
slightly from 1996 fourth quarter levels. The significant decrease in prices was
a result of lower consumption and high producer and consumer inventories during
1996, as newsprint consumers initiated conservation measures in reaction to
record high prices experienced in 1995. By the end of 1996, however, market
conditions began to improve as consumption increased and inventories held by
North American producers and U. S. daily newspapers declined compared to levels
earlier in the year. Consumption continued to improve in the first quarter of
1997, as total newsprint consumption and U. S. dailies' newsprint consumption
increased by 8 percent and 4 percent, respectively, compared to the first
quarter of 1996. Ad lineage for U. S. daily newspapers also increased by 5
percent comparing the same periods. As a result, the Company announced a $75 per
metric ton domestic price increase for March 1, 1997, the first since September,
1995. A significant portion of this price increase was realized in the first
quarter. Despite the increases in consumption, producer and consumer inventory
levels increased in the first quarter of 1997. Inventory levels of U. S. daily
newspaper publishers increased to a 39 day supply at the end of March 1997,
compared to a 36 day supply at the end of 1996, while North American producer
inventories increased 13 percent, compared to December 1996.

COATED GROUNDWOOD The Company's coated groundwood average transaction price
declined 35 percent comparing the first quarter of 1997 to the same period last
year. Throughout 1996, selling prices declined while producer inventory levels
surpassed historical levels, all as a result of lower demand. During the first
quarter of 1997, demand for coated groundwood papers improved; U. S. shipments
increased 28 percent as magazine ad pages increased 4 percent, compared to the
first quarter of 1996. U. S. producer inventories decreased 26 percent, while
the Company's inventory declined 31 percent, comparing the same periods.
Consumer inventories, built up during 1995 when prices were increasing rapidly,
are now at moderate levels. The Company's first quarter 1997 average transaction
price, which decreased for the three previous quarters, was unchanged compared
to the fourth quarter of 1996. These strengthening market conditions allowed the
Company to implement price increases of up to $60 per ton for various market
segments effective April 1. These price increases are expected to be realized
over the next several months.



                                      (10)

<PAGE>

                      BOWATER INCORPORATED AND SUBSIDIARIES

                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations
            Three Months Ended March 31, 1997, versus March 31, 1996

DIRECTORY PAPER The Company's average transaction price for directory paper
decreased 12 percent in the first quarter of 1997 compared to the first quarter
of 1996, the effects of which were more than offset by higher shipments of
approximately 8,000 tons comparing the same periods. During the first quarter of
1997, directory paper market conditions remained relatively unchanged from 1996,
as producers continued to experience the effects of consumer conservation
measures.

MARKET PULP The Company's market pulp average transaction price for the first
quarter of 1997 decreased 14 percent compared to the first quarter of last year,
and 7 percent compared to the fourth quarter of last year. The negative effect
from the price decline was completely offset by higher first quarter shipments:
63,500 metric tons higher than the first quarter of 1996 and 17,200 metric tons
higher than the fourth quarter of 1996. The Company's shipments in the first
quarter of 1996 were abnormally low, resulting in a significantly higher
inventory level at the end of March, 1996. Throughout most of the first quarter
of 1997, NORSCAN (U.S., Canada, Finland, Norway and Sweden producers) inventory
levels of bleached softwood market pulp were above the average for 1996. By the
end of March, however, these levels fell to 1.4 million metric tons, a decrease
of 14 percent from the first quarter of 1996. In addition, NORSCAN shipments of
bleached softwood market pulp increased 26 percent in the first quarter of 1997
compared to the year ago period. Although it is still unclear as to the extent
the pulp market is recovering, several major pulp producers have announced price
increases restoring transaction prices to fourth quarter 1996 list price levels,
effective May 1.

LUMBER The average transaction price for the Company's lumber products increased
33 percent in the first quarter of 1997 compared to the year ago period. Record
high housing starts in 1996 (1.5 million), coupled with strong foreign demand
and low producer inventories caused lumber prices to increase during 1996. In
the first quarter of 1997, demand decreased due to severe weather conditions and
less spring inventory stockpiling by consumers. For the full year, however,
industry analysts are predicting a strong market based on government estimates
of 1.4 million housing starts, and the re-building of structures in certain
parts of the country due to recent flooding conditions.

                   Cost of Sales and Other Income and Expenses

         Cost of sales increased 8 percent in the first quarter of 1997 compared
to the first quarter of last year. In the first quarter of 1997, the Company's
costs increased as a result of an increase in shipments of approximately 80,000
tons. On a per ton basis, however, costs decreased 7 percent, the majority of
which was due to the absence of product costs relating to the Company's
subsidiary, Star Forms Incorporated (Star Forms), which was sold in November
1996. Comparing the same periods, selling and administrative expenses decreased
approximately $6 million, the majority of this savings also due to the sale of
Star Forms in late 1996. Interest expense for the first quarter of 1997 was $1.5
million lower than the same period last year due to lower average debt balances
in 1997. Other income in the first quarter of 1996 included a pre-tax gain from
the sale of timberlands of $74.9 million.

                         Liquidity and Capital Resources

         The Company's cash, cash equivalents, and marketable securities balance
at March 31, 1997, totaled $350.4 million compared to $430.7 million at December
31, 1996, and $345.7 million at March 31, 1996. The large decrease from December
31, 1996, was a result of the repurchase of 1.4 million common shares for $57.2
million, a $19.6 million dividend payment to the minority shareholder of CNC,

                                      (11)
<PAGE>

                      BOWATER INCORPORATED AND SUBSIDIARIES

                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations
            Three Months Ended March 31, 1997, versus March 31, 1996

and payments associated with a three-year incentive compensation program.

         During the first quarter of 1997, the Company's operations generated
$23.0 million of cash compared to $78.5 million of cash during the first quarter
of 1996, a decrease of $55.5 million. This decrease was primarily the result of
a decrease in operating income of $132.6 million, offset in part by a decrease
in tax payments of $85.7 million. The Company's estimated tax payments for 1997
will begin in the second quarter of 1997. In the first quarter of 1996, the
Company paid its entire 1995 tax liability. In addition, interest paid was lower
by $2.6 million due to lower debt balances, and payments of employee benefit
liabilities were higher by approximately $10.0 million.

         Cash flow from investing activities in the first quarter of 1997 was
$15.4 million lower than the first quarter of last year. Capital expenditures
for the first quarter of 1997 were $9.2 million higher compared to the first
quarter of 1996. The Company expects total capital expenditures for 1997 to
approximate $150 million, while its 1996 expenditures totaled $107 million. In
the first quarter of 1997, $106.7 million of net cash flow was from the maturity
of marketable securities. In the first quarter of 1996, the Company sold
timberlands resulting in proceeds of $113.7 million.

         Cash flow used for financing activities was $16.1 million lower in the
first quarter of 1997 compared to the year ago period. Cash dividends for the
first quarter of 1997 and 1996 included payments to the minority shareholder of
CNC totaling $19.6 million and $29.4 million, respectively. Also included in the
first quarter of 1996 were cash dividends of $2.0 million on the Company's 7%
PRIDES Series B Convertible Preferred Stock. On January 9, 1997, the Company
converted all of the outstanding depositary shares of the PRIDES using Bowater
common stock at a conversion ratio of .82 of a common share for each depositary
share, resulting in the issuance of 4,012,765 common shares.

         On February 10, 1997, the Company completed the repurchase of
approximately 10 percent of its outstanding common stock as part of a previously
announced stock repurchase program. During the first quarter of 1997, the
Company repurchased 1.4 million common shares at a cost of $57.2 million. In the
first quarter of 1996, 1.6 million shares were purchased at a cost of $63.6
million. In total, the Company purchased 4.0 million shares at a cost of $156.0
million.

         As a result of the foregoing, cash and cash equivalents increased $26.4
million since December 31, 1996, bringing the first quarter's balance to $111.7
million. This compares to an increase in cash and cash equivalents in the
previous year quarter of $81.1 million, resulting in a first quarter balance of
$345.7 million.

         On May 12, 1997, the Company redeemed for cash all of its 500,000
outstanding shares of LIBOR Preferred Stock, Series A, at its par value of $50
per share, plus accrued and unpaid dividends. The LIBOR stock was subject to
mandatory redemption on January 15, 1998.

                              Accounting Standards

         In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share." The
implementation of this standard in the fourth quarter of 1997 will not
impact the Company's results of operations, but will result in a different
calculation of earnings per share.

                                      (12)

<PAGE>

                      BOWATER INCORPORATED AND SUBSIDIARIES

                                     PART II

                                OTHER INFORMATION



Item 6.  Exhibits and Reports on Form 8-K


 (a)  Exhibits (numbered in accordance with Item 601 of Regulation S-K):

<TABLE>
<C>             <S>    

Exhibit No.       Description

10.1             Modification of Employment Agreement and Cancellation of Change in Control
                 Agreement dated as of April 30, 1997, by and between the Company and Robert D. Leahy.

27.1             Financial Data Schedule (electronic filing only).

</TABLE>


 (b)     Reports on Form 8-K:

          None



















                                      (13)

<PAGE>


                      BOWATER INCORPORATED AND SUBSIDIARIES

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                                 BOWATER INCORPORATED

                                      By         /s/  David G. Maffucci
                                                 David G. Maffucci
                                                 Senior Vice President-
                                                 Chief Financial Officer



                                      By         /s/  Michael F. Nocito
                                                 Michael F. Nocito
                                                 Vice President - Controller





Dated: May 15, 1997










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<PAGE>


                      BOWATER INCORPORATED AND SUBSIDIARIES

                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                               BOWATER INCORPORATED

                                    By   ______________________
                                               David G. Maffucci
                                               Senior Vice President-
                                               Chief Financial Officer



                                    By   ______________________
                                               Michael F. Nocito
                                               Vice President - Controller





Dated: May 15, 1997








                                      (14)


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