Mergers and acquisitions in the U.S. forest products industry: Motives, financing, and impacts
The U.S. forest products industry consists of the paper sector, lumber sector, and furniture sector. It has been one of the primary manufacturing industries in terms of total value of shipment and total number of employment. However, its financial performance has been lackluster for the past decade. In recent years, restructuring activities in the form of mergers and acquisitions (M&A) have greatly increased. Both the frequency and the scale of these consolidations have been extraordinary in the history of the U.S. forest products industry. This chapter reviews the motives, financing, and impacts of M&A in the U.S. forest products industry in the past fifteen years. The underperformance has motivated an unprecedented period of M&A within the industry. Stock exchange has been chosen by most of the acquiring firms to finance these M&A in order to maintain their debt levels and the transaction costs are usually huge in hundreds of millions of U.S. dollars. The expected consequences are value creation for those firms involved after M&A. © 2009 by Nova Science Publishers, Inc. All rights reserved.