92 days, 26 deals, US$1.4 billion1

M&A deal activity slowed down in Q3 2015 but momentum continues in the Americas region.

PwC is pleased to share with you our quarterly analysis of mergers and acquisitions (M&A) activity in the global forest, paper and packaging (FPP) industry for the third quarter (Q3) of 2015.


Global M&A activity in the FPP sector in Q3 2015 saw a decrease in deal volume and total deal value relative to the second quarter (Q2) of 2015. A total of 26 M&A deals were announced during Q3 2015 with a total value of US$1.4 billion and an average (median) deal size of approximately US$11.3 million. This compares to 47 deals in Q2 with a total value of US$3.4 billion and an average (median) deal size of approximately US$23.0 million.

In comparison to the third quarter in 2014, there was an increase in Q3 2015 in terms of total deal value, while deal volume remained the same. The graphs to the right provide a summary of deal activity by quarter for each of 2012, 2013, 2014 and 2015.

Notable deals

The top five largest announced deals in Q3 2015 (based on deal value) accounted for US$1.1 billion or 79% of total deal value. In addition, four of top five largest announced deals in Q3 2015 were focused in the Americas, whereas the top five largest deals in Q2 2015 were more focused in the Asia/Pacific and EUMEA regions. Furthermore, the top five deals in Q3 2015 all involved strategic buyers, as compared to a mix of strategic and financial buyers in Q2 2015.

The table below presents the information with respect to the top five deals announced in Q3 2015.

Multi-year deals analysis

Global FPP M&A Activity

Click here to view the graph.

Focus on deal activity in the US South

There were many notable deals in the US South announced by strategic buyers in Q3 2015, as follows:

  • Canfor Corporation entered into an agreement to purchase Anthony Forest Products Company, with facilities located in Arkansas, Louisiana, and Georgia, for a purchase price of US$93.5 million;
  • Hancock Timber Resource Group completed the purchase of approximately 98,000 acres of timberlands in west-central Florida from Plum Creek Timber Company for approximately US$120.0 million; and
  • WestRock Company entered into an agreement to acquire SP Fiber Holdings, with mills located in Dublin, Georgia and Newberg, Oregon for US$288.5 million.

Geographical Distribution of Deals

The distribution of announced deals in Q3 2015 (based on total deal value) was more geographically focused in the Americas region than was the case in Q2 2015. The figure below presents the respective information for Q3 2015.

In the Americas, both deal volume and total deal value have decreased from Q2 2015. There were eight announced deals in the quarter with a total deal value of US$747 million.

In the EUMEA region, there were five deals with a total deal value of US$38 million. Both the deal volume and total deal value are lower than in Q2 2015.

There were 13 deals with a total deal value of US$636 million in the Asia/Pacific region. The Asia/Pacific region has seen a decrease in both deal volume and total deal value in relation to Q2 2015.

Trends and insights

In the upcoming quarters we expect the major trends impacting the sector to continue to influence deal making. These trends include:

  • The strengthening of the US economy
  • Accessing Asian markets
  • Security of fibre supply
  • Consolidation of supply chains

Altogether, economic conditions and industry trends are driving opportunities for FPP companies to create shareholder value. We expect deal making to continue in the sector as companies look to gain strength in core markets.

About the data

Deal information was sourced from S&P Capital IQ and includes deals for which buyers or targets fall into specific industry sectors. Certain adjustments have been made to the information to exclude transactions that are not specific to the FPP sector.