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Portfolio & StrategyRegulatory & Legal 23 Sep 2026

UPM and Sappi's EUR 1.42bn graphic paper venture faces likely EU veto, Reuters reports

UPM and Sappi's proposed joint venture combining their communication paper businesses, valued at EUR 1.42bn (USD 1.62bn), faces a likely European Commission prohibition, Reuters reported citing people familiar with the matter, after the companies offered no concessions and did not persuade regulators at a closed hearing. The Commission must decide by 11 November 2026; in August 2026 it issued a statement of objections saying the deal could reduce competition and raise prices in graphic paper used for magazines and books. Both companies declined to comment to Reuters.

Why this mattersA veto would remove the planned consolidation of Europe's shrinking graphic paper capacity, leaving both producers to manage overcapacity independently.

  • The proposed joint venture would combine UPM and Sappi's communication paper businesses at an enterprise value of EUR 1.42bn (USD 1.62bn).
  • The European Commission must rule on the deal by 11 November 2026, according to Reuters sources.
  • UPM and Sappi have not offered concessions and did not persuade regulators at a closed hearing, Reuters reported.
  • Difficulty finding a buyer for potential divestment assets has complicated a remedy, per the sources.
  • The Commission issued a statement of objections in August 2026, citing risk of reduced competition and higher prices in graphic paper, including for magazines and books.
  • The partners signed the agreement in May 2026, expect annual synergies of about EUR 100m and UPM has said it targets completion by the end of 2026.
  • European graphic paper demand fell from 40 million tonnes in 2008 to 13 million tonnes in 2025, with mills running about 30% overcapacity, and is forecast to fall further to 8 million tonnes by 2030
  • If approved, about 2,500 employees and 1.2 million tonnes of German graphic paper production would move into the new joint venture
  • UPM says financing for the joint venture through banks is already secured
  • UPM's Gunnar Eberhardt, designated CEO of the joint venture, said the companies still expect a positive Commission decision
  • Oral hearing before the Commission took place on 15 September 2026, with a decision now expected in early November 2026.
  • UPM says financing for the joint venture is secured and its proposed leadership is named: Gunnar Eberhardt as CEO, Sappis Stephen Blyth as CFO.
  • UPM Gunnar Eberhardt says a rejection would be a missed opportunity for the industry, employees and Europe.
  • If completed, about 2500 employees and 1.2 million tonnes of German graphic paper production would move into the new company.
  • EU Commission says the JV would create a market leader able to raise prices, reduce choice and lower quality for customers
  • Companies held an oral hearing with the Commission on 15 September 2026, with a decision expected in early November 2026
  • European graphic paper demand fell from 40 million tonnes in 2008 to 13 million tonnes in 2025, with mills at 30% overcapacity, forecast to fall to 8 million tonnes by 2030
  • UPM's Gunnar Eberhardt is designated CEO of the JV, with Sappi's Stephen Blyth as CFO; bank financing is secured and integration planning has begun
  • European Commission issued a Letter of Facts restating serious concerns about the proposed joint venture.
  • UPM disagrees with the Commission's preliminary assessment and will propose remedies that exclude divestments.
  • China, South Africa and the United States have already cleared the transaction.
  • Commission's final decision is now expected by year-end 2026 or shortly after.
  • UPM and Sappi received a Letter of Facts from the European Commission on or before 5 October 2026 restating serious concerns about the joint venture.
  • The companies plan to submit remedy proposals but rule out divestments.
  • China, South Africa and the U.S. have already approved the transaction.
  • The EU's draft revised Merger Guidelines, published 30 April 2026, are cited by UPM as relevant to the assessment.
  • The EU extended its Phase 2 remedy deadline by 20 days to 9 December 2026.
  • UPM disclosed the Commission's renewed concerns on 5 October 2026 via a Letter of Facts.
  • UPM and Sappi intend to offer remedies without divestments.
  • The Dörpen mill in Germany is among the assets covered by the planned UPM-Sappi tie-up.
  • UPM and Sappi have rejected a proposal put forward by the European Commission to address its competition concerns.
UPM Sappi European Commission counterparty
Sources printindustry.ru RU graficar.si SL kauppalehti.fi FI kauppalehti.fi FI Augsburger Allgemeine DE Augsburger Allgemeine DE AD HOC NEWS DE Augsburger Allgemeine DE chemxplore.com Yahoo Finance sa.marketscreener.com law360.com AD HOC NEWS noz.de DE
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Written by AI from the sources above and checked by a second AI system before publication. No human wrote or edited this story. How it is made.

Updates

  • 2026-09-27 · Update: UPM and Sappi say their graphic paper joint venture, which the European Commission is expected to block, is targeted to deliver annual synergies of about EUR 100m.
  • 2026-09-28 · Edited before publication: No decision has been taken and the source reports only that Reuters, citing sources, expects a veto; the headline stated the veto as an expectation of the Commission itself. Reworded to attribute and to carry the deal value with its USD conversion (EUR 1.42bn at 1.1403 = USD 1.62bn, correct). Remaining facts are grounded.
  • 2026-09-28 · Edited before publication: Eight key facts against the maximum of six; trimmed, keeping the ruling deadline, the absence of concessions and the remedy difficulty, and folding the synergy and timing points together. EUR 1.42bn converts correctly to USD 1.62bn at 1.1403. Reuters sourcing is attributed throughout, which is required as no decision has been taken.
  • 2026-09-29 · Further coverage added: kauppalehti.fi
  • 2026-09-29 · Further coverage added: kauppalehti.fi
  • 2026-09-30 · Update: UPM and Sappi say they still expect a positive ruling after the Commission signalled the venture may not offer enough efficiency or resilience benefits to offset price and choice concerns, with a decision now due in early November 2026.
  • 2026-10-01 · Update: UPM says the Commission is not yet convinced of the joint ventures benefits after a 15 September oral hearing, but still expects clearance in early November.
  • 2026-10-05 · Update: UPM says the EU Commission remains unconvinced the JV's benefits outweigh competition concerns, after an oral hearing on 15 September 2026, with a decision now expected in early November 2026.
  • 2026-10-06 · Update: The European Commission has sent UPM and Sappi a Letter of Facts restating serious concerns over their graphic paper joint venture, and the companies plan to offer remedies excluding divestments.
  • 2026-10-07 · Update: UPM and Sappi have received a Letter of Facts from the European Commission restating serious concerns over their graphic paper joint venture, and plan to propose remedies short of divestments ahead of a decision expected by year-end 2026 or shortly after.
  • 2026-10-09 · Update: The European Commission has extended its Phase 2 remedy deadline for the UPM-Sappi communication paper joint venture by 20 days to 9 December 2026, after restating competition concerns in a Letter of Facts; the companies intend to offer remedies without divestments.
  • 2026-10-09 · Update: UPM and Sappi have rejected a European Commission proposal to address competition concerns over their planned paper production joint venture, which includes the Dörpen mill in Germany.