Will Stora Enso and UPM Combine Their Paper Businesses?

Stora Enso and UPM seen taking steps towards tie-up

Sept. 26, 2013 (Reuters) - UPM-Kymmene and Stora Enso, the world's leading makers of printing and writing paper, are being driven towards a merger of their European units by a relentless fall in demand and prices in the digital era.

A shift by consumers and offices away from newspapers, magazines and the printed word in favour of smartphones, tablet computers and online working has trimmed European demand by around a quarter since 2007.

A decade-long programme by manufacturers to cut excess mill capacity has failed to stem the decline in prices and profit.

Now after years of speculation about a possible tie-up, investors have in recent weeks raised bets UPM and Stora will fold most of their paper businesses into a joint venture over the next year.

The two companies have declined to comment on potential deals and there are no signs they are in official talks.

The full story is avaialbe at: Reuters.com

SOURCE: Reuters