Southwest is the nation's 10th-largest newsprint producer.

Mr. Duncan said the key question for Abitibi was whether other newsprint producers would post similar increases.

An important factor in the improved conditions for newsprint producers is that the industry has not increased its production capacity.

Those increases, hailed by newsprint producers, have been unhappily received by newspapers, which account for about 75 of newsprint consumption.

In January, many newsprint producers tried to raise the price to $710 a metric ton, but had to roll back the official price to $685.

Shareholders of Donohue, the smaller but more successful of the two newsprint producers, will own 55 percent of the merged venture.

This time the companies were owned by Abitibi-Price Inc., the Canadian newsprint producer.

Mr. Hutchison said the newsprint producers faced the prospect of making multimillion-dollar investments in new or altered plants at a time when newsprint prices are depressed.

The merger of Abitibi and the Price Brothers made it the world's biggest newsprint producer.

The mill marked the beginnings of the Canadian newsprint producer later known as QUNO, in which Tribune held an investment interest until 1995.