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PÖYRY POINT OF VIEW REPORT / 10 May 2017

How is M&A activity shaping European tissue industry?

Since 2000, the European tissue volume has grown from 5.7 million tons to almost 8.5 million tons. A clear trend connected to this growth has been consolidation of the largest players.

At the same time with increasing volumes, the largest producers have been growing through not only new capacity but major consolidation. By strengthening their position, these players have also improved their profitability. Consolidation has resulted in significant synergy benefits and positively impacted the overall business environment. 

There is, however, a limited number of opportunities for large acquisitions. Since 2012, European tissue acquisitions have been relatively small – the recent M&A activities have focused on small companies and individual mills. On the other hand, the Eastern European industry especially is still fairly fragmented, providing opportunities for consolidation.

While large companies have become even larger, there has been a continuous stream of new generation of entrants to the tissue business. Financial owners are becoming more common, especially in growth areas such as Iberia and Eastern Europe, bringing new dynamics into the market. In addition, previously small and local family-owned companies have grown significantly and become the largest ownership group in the European market. 

This article examines the past and current M&A trends, business logic, industry players and the future of European tissue.

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Pirkko Petaja
Principal
Mikko Helin
Senior Consultant