The European Commission (EC) has now been notified by UPM and Sappi about their plans to form a joint venture and has invited observations on the proposed deal.
The EC, the executive cabinet of the European Union, stated on Thursday (26 March) that a week earlier on 19 March it received notification of the “proposed concentration”, which would see UPM and Sappi “acquire within the meaning of Article 3(4) of the Merger Regulation joint control of the whole of a newly created company”.
“The concentration is accomplished by way of purchase of shares in a newly created company constituting a joint venture,” the EC stated.
“The newly created joint venture will operate as a standalone global manufacturer and supplier of communication paper products. UPM will contribute its communication paper businesses in Europe and the US, and Sappi will contribute its European communication paper business to the joint venture.
“UPM and Sappi will contribute some of their business in speciality paper, pulp and electricity as well.”
The EC stated that, on preliminary examination, it finds that the notified transaction “could fall within the scope of the Merger Regulation”.
“However, the final decision on this point is reserved. The Commission invites interested third parties to submit their possible observations on the proposed concentration to the Commission.”
Reuters reported that EU antitrust regulators will now decide by 28 April 2026 on whether to approve the proposed deal.
Announced by the two companies in December, the planned joint venture would create a huge new player in graphic paper.
UPM stated in December that the joint venture, encompassing 12 paper mills, would rationalise supply “in an industest burdened by declining demand, structural overcapacity and high energy costs”.
Sappi had added that “recent trade tensions and tariffs have further disrupted trade flows resulting in increased Asian exports to the European Union”.
UPM’s share price was €26.70 (£23.18) at the time of writing at lunchtime today (31 March) (52-week high: €27.94, low: €21.72).
Sappi’s share price was ZAC1,733 (around 76p) (52-week high: ZAC3,801, low: ZAC1,500).
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