Hokuetsu Paper Mills Ltd. and Nippon Paper Group Inc. said Friday they have formed an alliance that includes mutually supplying paper products, joint procurement of materials, distribution network cooperation and joint operations overseas.
Hokuetsu, Japan's sixth-largest paper maker, and second-ranked Nippon Paper expect the alliance to produce synergies amounting to a combined 30 billion yen in operating profit in five years through fiscal 2011.
The two companies have been negotiating on the specifics of the tieup since September, following an unprecedented hostile takeover bid launched by the nation's largest paper producer, Oji Paper Co., in August to acquire a controlling stake in Hokuetsu.