Bowater to S.C.: ‘Au revoir’
Paper maker will lay off some, move base to Montreal in merger with Canada company
By JIM DuPLESSIS
jduplessis@thestate.com
South Carolina will lose its place as headquarters for Bowater, as the paper maker moves its home from Greenville to Montreal in a merger with a Canadian competitor.
Bowater on Monday announced the $8 billion stock swap with Abitibi-Consolidated. The new company, AbitibiBowater, will lay off some of the 200 employees at Bowater’s headquarters in Greenville after the merger is completed, which is expected to occur by September.
Slightly more than half of Bowater’s employees in Greenville are in jobs that support manufacturing, sales and other functions. They will remain at the Upstate location, which will revert to a regional office, said David J. Paterson, who became Bowater’s chief executive last year and is moving to Montreal to be chief executive of the new company.
The merger is not expected to affect Bowater’s 900 workers who make coated paper for magazines at its Catawba plant near Rock Hill.
The move of Bowater’s Greenville headquarters follows several S.C. companies that have left the state in recent years, usually because the home company was bought by an out-of-state company. The losses include the homes of Ryan’s in Greer, Polymer Group in North Charleston and Liberty Corp. in Greenville.
Don Schunk, research economist at Coastal Carolina University in Conway, said headquarters have direct economic benefits in bringing high-paying jobs and research to the state.
An intangible benefit of being home to major companies is that it helps draw others, and South Carolina hasn’t gained many, Schunk said.
“So any loss is a problem,” he said. “It’s not going to look good to see someone moving out of the state.”
The combination of Bowater and Abitibi will create a company with about $7.9 billion in sales. AbitibiBowater will be the third-largest publicly traded paper and forest products company in North America and the eighth-largest in the world, the companies said.
AbitibiBowater will own or operate 32 pulp and paper mills and 35 lumber mills, most of them in the Southeast and in eastern Canada.
Both companies have suffered losses and job cuts in recent years, partly from rising imports from Asia and declining demand from newspaper publishers.
Their merger is expected to allow the companies to cut $250 million in costs, partly through layoffs of top-level executives and eliminating other overlaps.
“I believe we’re back in the black,” Paterson said in Montreal.
Moving the headquarters to Montreal was part of “balancing” the deal between U.S. and Canadian interests, “showing we were trying to merge these companies on equal terms,” Paterson said. More than half of AbitibiBowater assets will be in Canada.
The companies will combine as shareholders swap stock in the current companies for stock in the new one.
Company officials described the deal as “a merger of equals,” but former Bowater shareholders will own 52 percent of the new company.
Bowater was the third-largest publicly traded company with headquarters in South Carolina based on its $3.5 billion in 2005 sales — trailing Hartsville-based Sonoco Products and Columbia-based SCANA.
Bowater opened the office beside the Reedy River falls in downtown Greenville in 1981 when the company changed from being a British company to a U.S. company with headquarters in Darien, Conn. In 1992, the company announced it was moving its corporate headquarters to Greenville.
Reach DuPlessis at (803) 771-8305.
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