EU to decide on UPM and Sappi paper deal by April 28
EU regulators will decide by April 28 on the 1.42-billion-euro UPM and Sappi paper deal. The venture aims to address falling demand and industry overcapacity.
European Union antitrust regulators are set to decide by April 28 whether to approve a proposed graphic paper joint venture between the Finland-based forestry firm UPM-Kymmene Oyj and the South Africa-listed wood fiber group SAPPI LIMITED. According to a filing on the European Commission website, the 1.42-billion-euro ($1.65 billion) deal involves merging UPM’s communication papers unit with Sappi’s graphic paper operations in Europe.
The distribution of assets for the joint venture includes contributions from several countries. UPM-Kymmene Oyj will provide assets located in Germany, Finland, the United Kingdom, and the United States. The contribution from SAPPI LIMITED will consist of assets based in Austria, Germany, the Netherlands, and Finland.
The industry is currently navigating a period of falling demand, driven by the rise of digitalization and structural overcapacity. Additionally, manufacturers are facing high energy costs and increased competition from paper imports arriving from Asia and Latin America.
The European Commission, acting as the competition regulator for the bloc, can choose to clear the deal with or without demanding concessions after its initial review. Alternatively, the Commission may initiate a full-scale investigation if it determines that the merger poses significant risks to market competition.
