Paper packaging market set for more consolidation, predicts PwC

Clive Suckling, PwC’s global forest, paper and packaging leader said that there was still a gap between vendors’ and buyers’ expectations of how much assets are worth in the fibre-based packaging sector.

He told Packaging News that he anticipated vendors’ expectations would lower and come into line with those of the buyers facilitating consolidation over the next six months.

Suckling’s comments come in the wake of a PwC report, released this week, that revealed that the total value of deals in the forest and paper sector fell 23% to US$21.3bn in 2008.

The report, titled ‘Forest, Paper and Packaging Deals 2008′, claims that the credit crunch could lead the sector towards a merger-and-acquisition low in 2009.

Spanish packaging group SAICA’s acquisition of SCA’s corrugated business in the UK was highlighted as the biggest fibre-based packaging deal in Europe last year.

According to Suckling, deal making is driven by a business need and availability of finance.

“With the industry on course towards significant restructuring, the first of these exists in abundance. It is the second which will determine the level and pace of activity in the period ahead.”

Copies of the report are available to download here.

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