24 July 2006 — Tokyo (JPN): Japan’s largest paper manufacturer, Oji Paper, has launched a hostile takeover bid of Hokuetsu Paper Mills in a deal that could create the world’s fifth largest paper group.
Oji Paper’s takeover bid aims to capture 50.1 percent of Hokuetsu with the long term intention to buy all of its shares, costing $1.2 billion at offer price.
Hokuetsu has vowed to fight off the bid by selling shares to Mitsubishi.
Following the news, paper stocks rallied by 4.6 percent on the expectation of industry consolidation resulting in fewer producers, limited supply and stabilised prices.
If successful the deal will create the world’s fifth largest paper group behind International Paper, Stora Enso Ojy, Svenska Cellulosa and Georgia-Pacific. Oji is currently ranked seventh.