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Forest, paper and packaging deals insights: 2021 outlook

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Executive summary

2020 was a year dominated by uncertainty stemming from the COVID-19 pandemic, which also disrupted the global M&A market. While global M&A has seen a recovery during the second half of 2020, deal-making in the Forestry, Paper and Packaging has been muted relative to other sectors. The third quarter experienced a rebound both in value and volume; however, deal-making in the sector cooled off in Q4’20 as a resurgence of COVID-19 hit the US, Europe, and parts of Asia. Overall, FPP deal value and deal volume declined by a significant 41% and 38%, respectively, in 2020 compared to 2019. 

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2:27

Challenges and opportunities for deals in 2021

PwC's Deals Sector Leader John Potter discusses the trends driving deals and outlook for 2021.

PwC's Deals Sector Leader John Potter discusses the trends driving deals and outlook for 2021. Explore national deals trends


Forest, paper and packaging deals outlook

The challenges and uncertainty experienced in 2020 resulting  from COVID-19 will likely continue to impact M&A activity into 2021 as much of the world copes with a resurgence in infection rates. We do, however, expect continued recovery of deal activity in 1H’21 from sector lows that occurred at the beginning of the pandemic.  Investment in innovation, sustainable solutions and supply-chain optimization will likely persist as key drivers of M&A activity in 2021.  Forest, Paper and Packaging companies must continue adapting to this new, evolving environment, particularly in how they assess and evaluate M&A opportunities and how they get deals done. 


“While the world recovers from the impact of the COVID-19 pandemic, deal makers must be laser focused on ensuring their M&A strategies align with the evolving competitive landscape. Supply chain optimization, technology and sustainable solutions will continue as M&A drivers as companies adapt to a new way of being.”

Max Blocker - Global Forest, Paper, and Packaging Leader

Key deal drivers

Changing of political landscape

As  new presidential leadership takes place in the United States, greater governmental regulation, higher income tax rates, and an easing position on trade is expected.  The degree of such change will depend greatly on who controls the US Congress which will be known in January of 2021. Volatility is not favorable for deal makers and given the mentioned political shift and  the resurgence of COVID-19 around the world, the capital markets could become more volatile.

Opportunities in innovation

Technology and innovation will continue as popular themes, particularly in how the pandemic continues to impact the way we work, live and consume.  Such solutions will likely continue to be highly sought, and cross-sector companies offering key capabilities will likely be attractive targets or industry acquirers. We expect companies to continue to invest in digital supply-chain solutions, and technologies related to sustainability. The COVID-19 pandemic has proven that companies need to increase technological capabilities to reduce the risk of operational disruptions.

New ways of being

COVID-19 has disrupted consumer and workforce behaviors as safety becomes more important,  and local lockdowns are still in place around the world.  We expect increased use of e-commerce to persist, as consumers seek out contactless purchases --  thereby increasing demand for quality consumer packaging and corrugated shipping cartons. Sustainability has become a key theme as business models adapt to changes in supply chains and consumer demand. 

Contact us

Max Blocker

US and Global Forest, Paper and Packaging Leader, PwC US

Harry Gruits

Forest, Paper and Packaging Deals Leader, PwC US

Jason Boyer

Canada Forest, Paper and Packaging Deals Leader, PwC Canada

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