Nippon Paper Group Inc. and Rengo Co. said Friday they have no plans to merge, denying an Asahi newspaper report they may join to create Japan's biggest paper manufacturer.
Nippon Paper, the nation's second-biggest papermaker, and Rengo, a corrugated cardboard maker, issued statements at the Tokyo Stock Exchange denying the report.
Rengo would merge with Nippon Paper's cardboard business, becoming a unit of Nippon Paper, the Asahi reported. A merger would increase the companies' leverage to negotiate higher product prices to offset soaring costs for wood chips and energy.
Nippon Paper is the third-largest shareholder in Rengo, with 5 percent, and Rengo is the fourth-largest holder of Nippon Paper shares, with 3 percent as of Sept. 30.