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Recent M&A activity focused on the Americas


April 29, 2015
By Pulp & Paper Canada

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Activity in mergers and acquisitions among forest products, paper and packaging companies is off to a good start in 2015, according to the Forest, Paper & Packaging Deals Insights Quarterly published by PwC.

Activity in mergers and acquisitions among forest products, paper and packaging companies is off to a good start in 2015, according to the Forest, Paper & Packaging Deals Insights Quarterly published by PwC.

First quarter activity is highlighted by Rock-Tenn and MeadWestvaco combining to create a leading global provider of consumer and corrugated packaging,

Global M&A activity in the FPP sector in Q1 2015 saw an increase in total deal value relative to the fourth quarter (Q4) of 2014. A total of 31 M&A deals were announced during Q1 2015 with a total value of US$12.3 billion and an average (median) deal size of approximately US$8 million.

This compares to 34 deals in Q4 2014 with a total value of US$2.8 billion and an average (median) deal size of approximately US$36 million.

In comparison to the first quarter in 2013 and 2014, there was an increase in Q1 2015 in terms of total deal volume and a significant increase in terms of deal value.

The top five largest announced deals in Q1 2015 (based on deal value) accounted for US$12.0 billion or 98% of total deal value, with the largest deal accounting for the majority of the total. In addition, the top five largest announced deals in Q1 2015 were focused in the Americas and the EUMEA regions, whereas the top five largest deals in Q4 2014 were more evenly spread across all regions.

A number of the top five deals in Q1 2015 involved strategic buyers as opposed to financial buyers. Among the notable deals announced by strategic buyers in the Americas region, are:

• Rock-Tenn Company and MeadWestvaco Corporation merged to create a consumer and corrugated packaging company with combined net sales of US$15.7 billion and adjusted EBITDA of US$2.9 billion.

• Hokuetsu Kishu Paper Co., Ltd, a Japan-based pulp and paper company, announced that it will acquire controlling stakes in Alberta, Canada based pulp company Al-Pac Forest Products Inc. and its marketing unit, Al-Pac Pulp Sales Inc. from Mitsubishi Corp. and Oji Holdings Corp. Terms of this transaction were not publicly disclosed.

• Smurfit Kappa Group acquired Grupo CYBSA, a non-integrated corrugated, folding cartons and flexible packaging manufacturer with operations in El Salvador and Costa Rica.