Home / Business and Economy / EU Mulls Paper Giant Deal: UPM & Sappi Venture Under Scrutiny
EU Mulls Paper Giant Deal: UPM & Sappi Venture Under Scrutiny
23 Mar
Summary
- EU antitrust regulators will decide on the UPM and Sappi graphic paper joint venture by April 28.
- The proposed joint venture is valued at 1.42 billion euros ($1.65 billion).
- Industry faces falling demand due to digitalization and high energy costs.
EU antitrust regulators are evaluating a significant joint venture proposal between Finnish forestry firm UPM-Kymmene and South African wood fibre group Sappi. A decision on this graphic paper venture is anticipated by April 28. The proposed collaboration involves a 1.42 billion euro investment, merging UPM's communication papers division with Sappi's European graphic paper operations.
UPM will contribute assets located in Germany, Finland, Britain, and the United States to this new entity. Sappi, in turn, will bring its assets from Austria, Germany, the Netherlands, and Finland into the joint venture. The timing of this deal coincides with a challenging period for the graphic paper industry.
This sector is experiencing a notable decline in demand, attributed to several factors. The increasing prevalence of digitalization is a primary driver, alongside issues of structural overcapacity within the industry. Additionally, escalating energy costs and a rise in paper imports from Asian and Latin American countries are further pressuring the market.
