By: The double blow of slowing home construction and falling newsprint demand is hitting wood and paper companies and forcing them to try to adapt quickly.
The strategies of choice: consolidation and cost-cutting.
Shareholders of Montreal-based Abitibi Consolidated and South Carolina's Bowater approved a deal last month to combine the two companies.
If U.S. regulators approve the deal, AbitibiBowater would become the third-largest forest products company in North America.
Meanwhile, Federal Way-based Weyerhaeuser has undergone restructuring and said it's considering selling off its containerboard business.
The volatility in the overall stock market in recent weeks hit forestry and paper stocks particularly hard.
The Dow Jones U.S. Forestry and Paper Index fell 21% over the past three months. That's not as steep as the Dow Jones U.S. Home Construction Index, which dropped by 32%, but still a far worse performance than other sectors that gained, such as consumer electronics and aerospace and defense.
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