Trading was halted for six hours Thursday in paper makers Stora Enso Oyj, Holmen AB and Norske Skog ASA after a Finnish newspaper said the three Nordic companies were planning to merge some operations.
Stora Enso denied the report in the Helsingin Sanomat daily. The other companies declined to comment on it.
Trading in the three companies was halted on the Nordic exchanges Thursday morning and resumed in the afternoon.
The Finnish newspaper reported that the three companies were planning to merge their newsprint operations to cut overcapacity and costs.
Forest product companies were hard hit in the global downturn and have been forced to cut production, close mills and lay off thousands of workers in the past few years with overcapacity forcing prices to crash.
Stora Enso CEO Jouko Karvinen has warned that overcapacity in the European newsprint market would reach 18 percent in 2010. Earlier this year he said the Finnish-Swedish company will further cut production by closing a mill in Finland because of falling prices.
Oslo-based Norske Skog's CEO Sven Ombudstvedt declined to comment on "speculations and rumors about strategic processes." He too has spoken about the need to restructure Europe's newsprint industry and said Thursday that the Norwegian company "is willing to contribute to ... an initiative" to restructure the industry.
Sweden's Holmen — Europe's fifth largest manufacturer of printing paper — declined comment on the newspaper report.
It reported a newsprint division operating loss of 170 million kronor ($23 million) in the second quarter, down from a profit of 150 million kronor in the same period a year earlier. It blamed weak demand for newsprint in Europe and lower selling prices.
Stora Enso: http://www.storaenso.com
Norske Skog: http://www.norskeskog.com
Associated Press writers Ian MacDougall in Oslo and Malin Rising in Stockholm contributed to this report.