One thing about watching the companies that are part of the Global 5000 – there is always something interesting to watch as these firms continue to look for growth and improving their business.
This morning reports included the news that two companies in the packaging/paper / container markets are getting together with TennRock acquiring Smurfit-Stone Container. As we look at The Global 5000 database, there are 68 companies in this space representing approximately $250 billion in total revenue. They grew 2.5% in 2008, then retreated by 11% in the difficult 2009 year and will likely come back almost 10% this year.
With that marketplace, it is an industry sector not on a fast-track growth path. Therefore, aggressive players who want to grow have to find other ways to do so outside of normal market demand. Acquisitions will get you growth. Smurfit-Stone had just exited bankruptcy and is almost 50% larger (in revenue) than TennRock. Together, the combined company will be about the same size as Rexam and Crown — two of the larger players in the market.
On a separate note — GM announced that sales to China in 2010 topped US sales for the first time. Now we know why we need to watch the Global market environment.