UPM Eyes Consolidation

Finland-based magazine paper maker UPM-Kymmene is said to be considering alternatives for consolidation.

UPM CEO Jussi Pesonen, according to a Reuters report, told a Finnish news agency that consolidation is necessary to improve profitability. "We are interested in consolidation combinations which are profitable and would increase shareholder value," Pesonen said. "Consolidation is integrally linked to improving competitiveness in the developed markets, especially in the European ones."

Details about the potential consolidation weren't immediately clear as a company spokesperson declined to comment, citing company policy not to "disclose information about any possible plans before decision making."

The spokesperson did confirm that, despite longstanding speculation, there are no plans to merge UPM with paper maker Stora Enso, which sold its U.S. holdings to New Page for about $1.7 billion, in a deal that closed earlier this year.

UPM reported first half revenue was about $7.03 billion, down about 5 percent from $7.43 billion during the first half of 2007. Net profit for the half was $132.27 million, up from a net loss of $291 million during the same period last year.

First half 2008 EBITDA was about $955 million, down from about $1.2 billion during the same period last year.

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