Anyone who says the paper industry isn't focused is just not paying attention to what's been going on lately. I don't have a lot of space here, but I'll gloss over some of the bigger deals that took place so far in 2007.

In early September, Boise Cascade announced that it is selling its Paper, Packaging & Newsprint businesses to Aldabra 2 Acquisition Corp. for $1.625 billion in a cash/stock deal where Boise Cascade gets $1.338 billion in cash (less $38 million in cash contributed by Boise Cascade at closing) and the balance in shares of Aldabra common stock. Boise Cascade said it will pay down debt and focus on its remaining Wood Products and Building Materials Distributions units, while Aldabra will call its new papermaking business Boise Paper Company.

A deal that has industry observers speculating in different directions is the merger of newsprint producers, Abitibi-Consolidated and Bowater. The companies have said they expect to achieve annualized synergies in the range of US $250 million. Abitibi's president and CEO, John Weaver, summed it up best when he said the new company (AbitibiBowater) “has a brighter future than either company would have on its own.”

Another Canadian papermaker, Domtar, made news in June when it announced that it would sell its forest products business to the newly created Conifex Inc. for approximately C$285 million including an estimated C$50 million of working capital.

Raymond Royer, Domtar's president and CEO, said the deal will allow his company to sharpen its focus on the North American fine paper market. Simply put, Royer said, “...softwood sawmilling operations are not core to our fine paper business.”

MeadWestvaco has also been in the news, selling 290,000 acres of owned forestland and 95,000 acres of leased forestland for $493.1 million. In the meantime, the company continues to bolster its packaging solutions business with the acquisitions of Keltec Dispensing Systems and Hayes Products.

In early August, Smurfit-Stone Container agreed to sell its Brewton, Alabama white top linerboard and bleached board mill to Georgia-Pacific for $355 million. Although net proceeds from the sale will be used for debt reduction, Smurfit-Stone's chief executive Pat Moore noted, “...the Brewton mill's SBS production no longer fits with our core business.”

In deals with regional market focus, SCA in January decided to sell its North American packaging operations to the private equity firm Metalmark Capital for $400 million. Then, less than two months later, SCA made a deal with Procter & Gamble to buy P&G's Western Europe tissue business for EUR 512 million.

SCA said the move was designed to strengthen its tissue position in Europe, whereas P&G said the deal would allow it to better focus on continued growth of its tissue business in the U.S., Canada, and Mexico.

And tapping into the emerging market scene is International Paper's 50:50 joint venture with Russia's Ilim Pulp. Although this JV has been in the works for some time, the two companies, after on-going talks and awaiting regulatory approval, in August signed a definitive agreement. The JV said it expects to invest $1.5 billion in Ilim's four mills over the next five years.

There were many other deals that took place in the first three quarters of 2007 and most fell into the category of “focusing on core products.”

I've heard too many times that the industry isn't what it used to be, and considering today's markets, that's not necessarily a bad thing.

John O'Brien can be reached at: jobrien@paperage.com

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