The planned merger between Sweden's Stora and Finland's Enso into the world's largest pulp and paper group is a sign of what lies ahead for the global paper industry, according to analysts, who have said that further consolidation in the European industry is likely to be led by Smurfit. "One of the most acquisitive companies will be Jefferson Smurfit. I think they will continue to acquire packaging companies in Europe," said Nordiska brokerage analyst, Mr Claes Vikbladh. "The targets are smaller and mediumsized ones which are not listed," he said. It has also been speculated that one outcome of the JS Corp/Stone merger will be that the Smurfit group will buy out Stone's European interests.

Analysts said pressure would be on Nordic players such as Finland's MetsaSerla, Sweden's MoDo, and Norway's Norske Skog to grow and they could be good targets for outside players.

Finnish papermaker UPMKymmene was deposed from its top European position because of the Stora Enso merger.

"UPM Kymmene is now mentioned quite often in the context of them doing something but they are in a fairly comfortable position so it's no rush. But they will be looking to expand," one analyst said.