NEW YORK—It took two years for consolidation to transform the commercial printing sector, it has taken two months of consolidation to transform the printing equipment supplier sector, and in a remarkably swift series of moves, it has taken scarcely two weeks for consolidation to transform the paper market.
In mid-February, the low share prices of paper companies, as well as the usual quest to expand markets and raw material sources, drove a series of mergers and acquisitions in the paper and forest products industry—moves that will have a broad impact on commercial printers, for whom paper products are a primary cost center.
Among the recent moves:
- Scandinavian Stora Enso has plans to buy Wisconsin Rapids, WI-based Consolidated Papers;
- Europe’s second-biggest paper and board maker, UPM-Kymmene, plans to buy Stamford, CT-based Champion International for more than $6 billion;
- International Paper (IP) said it was buying Shorewood Packaging;
- Canada-based Abitibi-Consolidated said it would buy Canadian Donohue (partially owned by Quebecor); and
- Quebec’s St. Laurent Paperboard agreed to a takeover bid by Chicago-based Smurfit-Stone Container for $1.4 billion in cash, stock and assumed debt. Stora Enso has already said it would buy Norway’s biggest paper wholesaler, Carl Emil A/S.
Stora Enso will buy Consolidated Papers for approximately $4.84 billion in cash, stock and debt, a move that officials say will make it the world’s top paper and board producer, with paper capacity of approximately 15 million metric tons.
Finnish company UPM-Kymmene said that when it completes its purchase of Champion, it will set up a new group, which will take the Champion International name and give the group paper production capacity of 12.1 million tons a year.
International Paper’s proposed purchase of Shorewood comes on the heels of Shorewood’s successful rejection of a hostile takeover bid by Chesapeake Corp. International Paper will make a cash tender offer of $21 per share; Shorewood shares jumped to just over $20 when the announcement was made. IP will also assume approximately $275 million of Shorewood’s outstanding debt producer.