Forest, paper and packaging deals: 2008 Annual Review


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Forest, Paper and Packaging Deals: Branching Out Annual Review 2008 reviews deal activity in the FPP industries. The report is the latest edition in our annual series on deal-making in the sector.

FPP Deals reviews in detail 2008 deal activity in the forestry, paper and fibre packaging sectors, and examines several related themes. The publication also focuses on deal activity by key regions, the success of deals and considers the likely outlook for industry consolidation.

In particular, this year's highlights that:

  • Deal values fell away rapidly.
  • Total FPP deal value declined by 23%, even though deal value during first half of 2008 surpassed that of 2007.
  • North American deal value in 2008 would have been down to its 2003 low were it not for International Paper’s US$6bn transaction.
  • In the forestry sector, deal volumes stayed quite high but value fell off sharply.
  • With US$11.9bn worth of deals, pulp & paper production accounted for 56% of total FPP deal value.
  • Behind pulp & paper production, deals in converting comprised the second largest segment of deal value, with a total US$3.8bn of deal value.
  • Wood products was where total deal value was most resilient, edging down just US$21 million to US$2.1bn.
  • The industry is set to undergo distress-led transformation, eg consolidation deals likely to be forced.

The report is one of a range of deals publications from PwC, covering sectors including mining, metals, renewable energy, power, oil & gas as well as FPP. Together the family of deals reports provide a comprehensive analysis of M&A activity across industries world-wide. Our FPP deals analysis is also complemented by our regular CEO Perspectives report, which analyses the viewpoints of a number of leading players in the FPP industries and explores many of the pressing imperatives facing the sector—overcapacity, cost control, the need for simpler, more flexible business models.