UPM, a forest industry company, and Sappi, a pulp and paper producer, continue to face European Commission concerns over their planned European graphic paper joint venture and are preparing a response to the regulator’s assessment.
The companies plan to submit proposals for specific remedies to address the competition concerns, UPM said in a statement. They do not plan to offer divestments because of the rationale for the transaction. UPM disagrees with the Commission’s preliminary assessment and will continue with the review process.The companies announced the planned joint venture in 2025 and signed a definitive agreement in May 2026. The transaction requires merger-control approvals before it can close.
China, South Africa and the U.S. have already approved the transaction. The European Commission is expected to issue its final decision by the end of 2026 or shortly afterward. The joint venture will begin operations after the transaction closes.
European graphic paper demand has fallen by more than half over the past 20 years and is projected to decline further. UPM and Sappi plan to use the joint venture to adjust industry capacity while maintaining customer supply and generating efficiencies.
UPM maintains that without the joint venture, continued demand declines and excess capacity would put European producers under greater pressure and could lead to further capacity closures. It also expects narrower paper-grade portfolios could increase customer dependence on imports.