The Final Word by Jim Thompson

I was recently asked, “When will the mergers and acquisitions in the pulp and paper industry end?” The answer: never.

There will always be entities, through strategic or financial decisions (voluntary or involuntary) that will want to sell facilities and there will always be buyers. The only thing that changes, up or down, is the price they can agree on, a price that is dependent on many factors. The question is similar to asking, if someone ever did, “When will they stop selling houses?”

Another question, prompted by my last editorial in this publication was, to the effect, if the business is in good shape and asset prices are relatively high, who would want to buy? The answer is someone who thinks they can make them go higher. It is just like buying and selling stock: for every seller there has to be a buyer. Someone, through strategic thinking or discouragement, has decided to sell and someone else, seeing an entirely different picture, has decided to buy. It is the same with whole businesses as it is with individual shares.

By the way, we have added a navigation bar to the PaperMoney website (www.globalpapermoney.org). I suggest you check it out--we believe it to be very valuable to those invested, with treasure, sweat or both, in the pulp and paper industry.