The European Commission has informed UPM-Kymmene Corporation ('UPM') and Sappi Limited ('Sappi') of its preliminary view that its proposed joint venture may restrict competition in the markets for different types of communication paper, which is used for printed materials, such as magazines or books.
UPM and Sappi are the two largest manufacturers of communication paper products in the European Economic Area ('EEA'). The joint venture would create the EEA market leader, by combining UPM's communication paper business in Europe and the US, with Sappi's communication paper business in Europe, as well as part of Sappi's speciality paper business and other ancillary activities.
In particular, the Commission is concerned that the joint venture would be able to increase prices and that customers would have less choice as a result of the transaction.
The Statement of Objections
On 28 April 2026 , the Commission opened an in-depth investigation to assess if the transaction would allow UPM and Sappi to reduce competition for certain communication papers, specifically in the markets for magazine paper and coated wood free paper in the EEA, UK and Switzerland. These two types of papers are used for printed materials such as magazines, books and promotional materials.
The Commission conducted a wide-ranging investigation to understand the affected markets and the potential impact of the transaction. This investigation has included, among others, the analysis of internal documents provided by the parties and the gathering of views and data from competitors and customers.
As a result of this in-depth investigation, the Commission is concerned that the joint venture between UPM and Sappi would acquire market power allowing it to increase prices and decrease quality to the detriment of its customers for coated mechanical paper, a type of magazine paper, and for coated wood free paper. The Commission is currently unconvinced that integrating the relevant activities in the joint venture would bring enough benefits – in terms of cost savings or environmental or resilience improvements– to offset the potential harm.
A Statement of Objections is a formal step in an investigation, where the Commission informs the companies concerned in writing of the objections raised against them. The sending of a Statement of Objections does not prejudge the outcome of the investigation. UPM and Sappi can now reply to the Commission's Statement of Objections, consult the Commission's case file and request an oral hearing.
Companies and products
UPM, headquartered in Finland, is a global material solutions company, that develops, produces, and markets paper products, pulp, electricity, label stock, sawn timber, and wood panel products, as well as biochemicals, biomass and plywood solutions.
Sappi, headquartered in South Africa, is a global manufacturer of everyday materials made from wood fibre-based renewable resources. Sappi supplies raw materials, like pulp and biomaterials, and end-use products, including communication, specialty, and packaging paper.
Background
The transaction was notified to the Commission on 19 March 2026. The Commission opened an in-depth investigation on 28 April 2026 and now has until 11 November 2026 to take a final decision.
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the EU Merger Regulation ) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
In addition to the current transaction, there are currently two other ongoing Phase II merger investigations: (i) the proposed acquisition of Anglo American's nickel business by MMG ; and (ii) the proposed merger between Saipem and Subsea7 .
