UPM and Sappi address EC concerns over planned graphic paper joint venture

Key highlights
  • European Commission sent a Letter of Facts restating serious concerns about the proposed graphic paper joint venture.
  • UPM disagrees with the Commission's preliminary assessment and will submit proposals to address concerns, saying these will not include divestments.
  • European demand for graphic paper has more than halved over the past two decades and is projected to decline further.
  • China, South Africa and the U.S. have approved the transaction; the European Commission’s final decision is expected by year‑end or shortly thereafter.

European Commission concerns and parties' response

UPM and Sappi have received a Letter of Facts from the European Commission stating it continues to have serious concerns about the proposed graphic paper Joint Venture. The parties are analysing the Letter of Facts and preparing a response. UPM disagrees with the Commission's preliminary assessment and will continue to engage with the review process. To address the Commission’s concerns, the parties plan to submit proposals for specific remedies, but not divestments.

Market rationale for the Joint Venture

The companies describe the JV as a response to structurally declining demand: due to digitalisation, demand for graphic paper in Europe has more than halved over the past two decades and is projected to decline further. They say the JV would enable a more orderly adjustment of capacity, help maintain reliable customer supply, generate efficiencies and support long‑term competitiveness, sustainability and resilience of the European graphic paper industry. Without the JV, they warn capacity closures could accelerate, narrowing grade portfolios and increasing dependence on imports.

Regulatory timeline and status

UPM and Sappi announced the planned Joint Venture in 2025 and signed the definitive agreement in May 2026. Most jurisdictions, including China, South Africa and the U.S., have already approved the transaction. The European Commission’s final decision is expected by year‑end or shortly thereafter, and the Joint Venture would become operational upon closing. The review takes place as the Commission updates its merger policy, reflected in draft revised Merger Guidelines published on 30 April 2026.

Source: UPM

chemXplore Weekly

The week’s project milestones and project news from the chemical industry, free every Wednesday.

Free. One email a week. Unsubscribe any time. See our Privacy Policy.

Related articles

5 November 2026
UPM and Sappi submit remedies in EC review of graphic paper joint venture

Remedies cover capacity optimisation, customer safeguards and investments in decarbonisation while the European Commission assesses the proposed joint venture; decision expected by year-end.

28 October 2026
UPM Q3 2026 — strong cash flow amid destocking and rising variable costs

Q3 sales €2,202m and comparable EBIT €131m; operating cash flow rose to €420m as working‑capital measures offset lower deliveries and higher variable costs.

16 September 2026
European Commission raises objections to MMG's proposed acquisition of Anglo American's nickel business

Regulator flags risk that the deal could curtail low-carbon ferronickel supply into Europe, raising stainless-steel production costs and weakening resilience.

8 September 2026
UPM and Sappi nominate leaders for planned graphic paper joint venture

Two executives named for CEO and CFO of planned graphic paper joint venture; appointments hinge on regulatory approvals and closing.

23 July 2026
UPM H1 2026: Q2 EBIT up 71%; plywood demerger approved and graphic paper JV agreed

Q2 comparable EBIT rose 71% to €212m; portfolio moves include a graphic paper joint venture and approved demerger of the plywood unit.