European Commission extends UPM-Sappi paper deal review to 9 December

A Commission spokesperson told Reuters the extension followed a request from the party that notified the transaction. The previous deadline was 11 November.

Letter of Facts and remedy plan

On 5 October UPM and Sappi said they had received a Letter of Facts from the Commission stating that it continued to have serious concerns about the joint venture. UPM said it disagrees with the preliminary assessment and will keep engaging with the review.

To address the concerns, the parties plan to submit proposals for "specific remedies, but given the rationale of the transaction, not divestments", UPM said. The statement said the companies announced the joint venture in 2025 and signed the definitive agreement in May 2026.

Veto threat and Commission concerns

Reuters reported on 18 September that the Commission was set to veto the deal after the companies declined to offer concessions, citing people familiar with the matter. One of those people said the companies failed to convince regulators at a closed-door hearing earlier that week, even after arguing the deal would support sustainability and resilience.

Finding a buyer for potential asset sales was difficult, making divestments not an option at the time, Reuters reported. The Commission's August statement of objections said the deal could weaken competition across several categories of communication paper used for magazines and books and could lead to higher prices and lower quality for coated mechanical and coated wood-free paper.

The Commission opened an in-depth investigation in April and paused the review in May while waiting for more information from the companies, PYMNTS reported.

The deal would combine UPM's communication paper business in Europe and the US with Sappi's European communication paper business, its specialty paper operations and related activities. It would create the biggest player in Europe in that segment, Reuters reported.

UPM's case

UPM says graphic paper demand in Europe has more than halved over the past two decades because of digitalization, and projects further decline. The joint venture would, in its account, allow a more orderly adjustment of industry capacity while maintaining reliable customer supply and generating significant efficiencies.

What happens next

The transaction still needs merger control approvals. China, South Africa and the US have already cleared it, UPM said. The company expects the Commission's final decision by year-end or shortly thereafter. The joint venture would become operational only on closing.