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EU Pauses Review of UPM-Sappi’s €1.42 Billion Paper Venture

By  |  June 4, 2026
EU Pauses Review of UPM-Sappi’s €1.42 Billion Paper Venture

European Union antitrust regulators have temporarily halted their examination of a proposed €1.42 billion ($1.65 billion) paper joint venture between Finland-based UPM-Kymmene and South Africa-listed Sappi while awaiting additional information from the companies, according to Reuters.

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    The European Commission, which oversees competition policy across the EU, paused its review on May 26 after requesting information it considers important to its assessment of the transaction. According to Reuters, the suspension means the regulatory timetable has been stopped until the requested material is submitted.

    “The ‘clock’ in merger investigations can be suspended if the parties fail to provide, in a timely fashion, an important piece of information that the Commission has requested from them (for its competition assessment) within a prescribed deadline,” a European Commission spokesperson said, according to Reuters.

    Once the companies provide the requested information, the Commission’s review will resume and a revised deadline for a decision will be set. Before the suspension, regulators had been expected to reach a decision by October 26, Reuters reported.

    The proposed venture would combine UPM’s communication papers business with Sappi’s European graphic paper operations. The companies announced the deal as the European graphic paper sector faces long-term challenges, including declining demand linked to digitalization, excess production capacity, elevated energy costs and growing imports from overseas markets, according to Reuters.

    The Commission launched an in-depth investigation into the transaction in April after identifying potential competition concerns. Per Reuters, regulators warned that the combination could significantly reduce competition in markets for coated mechanical (CM) paper and wood-free coated (WFC) paper, where both companies are among the largest suppliers in Europe.

    According to Reuters, EU officials are concerned that the joint venture could reduce production capacity and give the combined business greater pricing power. In its earlier assessment, the Commission said, “The transaction could result in a reduction of production capacity in those markets, along with higher prices and lower quality of CM and WFC paper for customers, which include printers and publishers.”

    Reuters previously reported that regulators believe competing suppliers may lack both the ability and incentive to counter any price increases resulting from the transaction. Those concerns could ultimately require the companies to offer remedies, such as divesting certain assets, before the deal can win approval.

    Source: Reuters