Chinese Paper Industry M & A Model Study

Based on industrial characteristics of China' s paper industry, I draw some conclusions as followings through researching M&A trend of international market and M&A cases of local market.1. There are certain investment value and M&A opportunities on China' s paper industry because it is basic area of national economy, coinciding with GDP' s growth.The paper industry consists of forest, pulp and paper.Chinese paper market is the second largest one in the world, with annual paper output of 65 million tonnes and annual paper consumption of 66 million tones.2. M&A is a good way for local paper companies to develop fast in reasonable time.3. M&A trend in paper industry obeys rules on industrial development including initialization, development, centralization and balance.4. Based on M&A model, it showed that there are three dimensions on M&A in China' s paper companies including industrial chain, market and M&A method.5. Based on Market Selection Matrix from Mckinsey, I think the priority to local companies M&A is market attraction and centralization. As a result, I found it is easier to entry for WFU, White board or containerboard, it is harder to entry for pulp, it is difficult to entry for fine paper and corrugating medium and it is worse to entry for newsprint.6. There are some key success factors on M&A value for local paper companies e. g. scale, performance and efficiency.According to characteristics of local paper industry, I found some suitable M&A targets focused on some attractive segments e. g. WFU, White board, fine paper and so on.