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.
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
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.”
Forest, Paper and Packaging Deals Leader, PwC US
Canada Forest, Paper and Packaging Deals Leader, PwC Canada