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Summer 2017

Forestry, Paper, and Packaging M&A activity
off to a strong start in ‘17
The PwC Q1 2017 FPP Deals Insights saw an increase in deal volume and total deal value relative to the fourth quarter (Q4) of 2016. A total of 23 M&A deals were announced during Q1 2017 with a total value of US$4.2 billion. This activity is being driven by a relatively healthy and optimistic building product sector, characterized by steadily improving US housing starts, which were up 9.9% in the fourth quarter of 2016 compared to same period in 2015.

“At the end of 2016, we saw a resurgence of US housing despite lower average commodity prices for building materials than the previous quarter,” said Kevin Bromley, Partner and PwC Canadian Forest, Paper and Packaging Leader.

M&A activity finished on a strong note, with the fourth quarter bringing in 39 deals with a value of US$3.4 billion. Overall, M&A deal activity was down in 2016 with 122 deals compared to 143 deals announced in 2015. The overall value of M&A activity was also significantly lower, with a value of US$11.5 billion in 2016 down from US$31.9 billion in 2015. Despite economic uncertainty, this indicates that the market is stabilizing and key players are forging deals to gain a competitive advantage.

Western Canadian based companies posted net earnings of $203.3 million in
Q4 of 2016, compared to net earnings of $30.7 million in Q4 of 2015. Eastern Canadian based companies posted net earnings of $16.3 million in the fourth quarter of 2016, compared to losses of $372.4 million in the fourth quarter of 2015.

“We are keeping a close watch on the new US Administration’s evolving trade policies, in particular, the current softwood lumber dispute and negotiations between US and Canada,” said Bromley. “The industry is also looking at other overseas markets to diversify trade and to seek new growth opportunities, such as China and is making inroads with new emerging markets including India.”

 

Summer 2017 News:
• First Nations sign Shared Territory Protocol Agreement
• Forestry, Paper, and Packaging M&A activity off to a strong start in ‘17
• Forestry sector sees opportunities in budget
• Deloitte and NORCAT partner to explore future of mining technology
• Vale shutters Sudbury mine
• Callinex completes drilling at Pine Bay 
• EACOM announces full acquisition of Anthony-EACOM

• Noront and First Nation sign advanced agreement
• Cementation Canada Big Winner at #DisruptMining
• Forest sector partners with Canada’s municipalities
• Vale closing Birchtree Mine
• Increase lumber imports from overseas in 2017
• Forestry industry applauds Ottawa’s response to softwood duties
• TMAC Resources announces commercial production at Doris Mine and Mill
• Multiple high-grade lithium pegmatites intersected at Ontario’s Mavis Lake Project

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