Sappi and UPM Sign Final Agreement to Form a Joint Venture
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The planned merger of UPM’s and Sappi’s graphic paper businesses is taking shape. Both companies have now signed a final agreement to establish a joint venture. The companies had initially announced a non-binding letter of intent regarding this in December 2025.
The joint venture aims to combine Sappi’s graphic paper operations in Europe with UPM’s Communication Papers business unit. Both partners are set to hold a 50% stake each. According to the information provided, the company will operate independently and have its own resources and management structures. According to the companies, the goal of the transaction is to strengthen the long-term competitiveness and resilience of the European market for graphic papers. This move comes against the backdrop of years of declining demand for graphic papers and persistently high cost pressures.
According to earlier statements, the transaction encompasses Sappi’s entire European graphic paper business as well as UPM Communication Papers’ operations in Europe, the UK, and the US. The value of the planned transaction was estimated at approximately €1.42 billion in connection with the ongoing review by the European Commission.
The implementation of the agreement remains subject to regulatory approval. The European Commission launched an in-depth investigation at the end of April. Competition regulators expressed concerns that the joint venture could restrict competition in certain segments, such as coated wood-containing and coated wood-free papers, and lead to price increases. A decision by the European Commission is currently expected by the end of October. Approvals in other jurisdictions, including the U.S. and China, are also required.
