The transaction will represent true global consolidation. The transaction is subjuect to customary conditions such as due diligence, financing, regulatory and board approval, and is expected to close in the fall of 1998.Each company will purchase a one-third stake in the joint venture, which will encompass the Asia-Pacific newsprint and groundnwood paper operations and sales of the three parties.

The joint venture will own 100 per cent of Hansol's Chonju mill in Korea, with annual capacities of 1,040,000 metric tonnes, as well as Hansol's 53 per cent ownershipin Shanghai Hansol Potential Co, a newsprint joint venture in China (130,000 mt capacity).

Norske Skog is in the process of closing the acquisition of Shinho's newsprint mills in Korea and Thailand, which have a combined capacity of 300,000 metric tonnes. These four mills will have a combined annual production capacity of nearly 1.5 million metric tonnes - an 18 per cent market share in the Asia-Pacific region and a 40 per cent market share in non-Japan Asia.

The objective of these transactions is to create the largest newsprint operations in Asia outside Japan. The joint venture will comprise blue-chip, extremely modern, low-cost assets in a long-term growth region.The average age of the newsprint machines will be only five years.

The net proceeds to Hansol will be used in its overall restructuring plans, which was undertaken by Hansol in rection to the current financial situation in Korea.

The parties have agreed that the joint venture will purchase Hansol's Korean and Chinese newsprint businessesfor a total consideration in the order of $1.0 billion. The Hansol and Shinho mills are valued at a weighted average of somewhat below 1,000 per metric tonne.

The parties' current intention is that additional information will only be disclosed upon the signing of definitive agreements. Abitibi-Consolidated is a leading manufacturer and global marketeer of newsprint and uncoated groundnwood papers.

Operating 18 mills throughout North America and the United Kingdom and selling product in more than 50 countries, its vision is to be the world's preferred marketeer and manufacturer of papers for communication.Hansol Paper is the second largest paper manufacturer in non-Japan Asia with an annual production capacity of 2.3 million metric tonnes of newsprint, woodfree paper and white duplex board. Hansol Paper has four mills in Korea and one mill in China and exports more than 40% of its production outside of Korea.

Offshore joint venture investment is one of the most important strategies for its continuedgrowth, utilising its powerful strategic position in the China market.

Norske Skog is a leading European manufacturer of newsprint and magazine paper. Based in Norway, the group has seven mills in Norway, France, Austria and the Czech Republic. Its sales organisation covers more than 50 countries on all continents.

The group's strategy is to become a global player in the publication of newspaper industry