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CONSOLIDATION PACE QUICKENS Five major announcements of impending capacity transfers made February 2000 a bigger month in forest industry mergers and acquisitions than any twelve-month period we remember. The consolidation trend has not escaped the notice of analysts and business reporters, who report the consensus that "more mergers are in the making." What's going on? Favorable stock valuations is one factor. As fourth-quarter earnings statements, released in January, confirmed that pulp and paper recovery was here to stay, pulp and paper stocks nonetheless followed the larger market's downdraft following the December highs, providing a favorable opportunity to clinch deals which had been under preparation for some time. The upswing in pulp and paper profitability, meanwhile, makes assumption of new debt less stressful for acquiring companies. With respect to the two transatlantic mergers, analysts note the longstanding desire of integrated Nordic companies to improve their presence in North American markets and suggested that the trend could "put pressure on other European companies, as well as U.S. players, to look more aggressively overseas." Back to "News" Forest Resources Association
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