Mead and Westvaco are the latest groups to contribute to paper industry consolidation, after agreeing to a 2bn ($3bn) stock-swap merger.

A spokesman for Westvaco said the deal should be completed in the fourth quarter, and added that the groups did not foresee any regulatory obstacles that would stand in their way.

The new company will be called MeadWestvaco and will be based in Stamford, Connecticut. Jerry Tatar, Meads chairman, president and chief executive, will become chairman of the combined company.

The spokesman said it was yet to be determined if there would be any divestment of operations but confirmed some reductions in staffing were anticipated.

The merger will create a company with annual revenue of more than 5bn ($8bn). It is expected to lead to annual operating synergies of more than 223m by the end of the second year.