EU Pauses Review of UPM-Sappi Paper Joint Venture Pending Additional Information

European Union antitrust regulators have suspended their review of a proposed €1.42 billion ($1.65 billion) joint venture between Finnish forestry company UPM-Kymmene and South African paper producer Sappi after the companies failed to provide requested information within the required deadline.

The European Commission, which oversees competition policy in the EU, halted its investigation on May 26 under a procedure known as “stopping the clock.” According to the Commission, merger reviews can be suspended when parties do not submit information deemed necessary for the regulator’s competitive assessment within the prescribed timeframe. The review will resume once the requested data is provided, and a new decision deadline will then be established. The previous deadline had been set for October 26.

The proposed transaction would combine UPM’s communication papers business with Sappi’s European graphic paper operations. The companies have said the joint venture would operate as an independent business and be jointly owned on a 50-50 basis.

The Commission opened an in-depth investigation in April after raising concerns that the deal could reduce competition in the European markets for coated mechanical paper and wood-free coated paper. Regulators said both companies are major suppliers in those segments and warned that the combination could lead to higher prices, reduced production capacity, and lower quality for customers such as printers and publishers.

The transaction comes as the European graphic paper industry faces declining demand, structural overcapacity, rising energy costs, and increasing import competition.

The European Commission has not indicated when the review will restart, pending receipt of the requested information from the companies.