EU antitrust regulators block UPM and Sappi joint venture in coated paper market

Finland's UPM and South Africa's Sappi attempted to create a joint venture that would combine UPM's coated paper business in Europe and the United States with Sappi's European coated paper operations. The proposed entity would own twelve paper mills, including four in Finland, and be equally owned by the two firms. After a closed hearing, EU competition authorities said the companies did not provide satisfactory answers to concerns that the venture could restrict competition, give the new firm market-leading power, and allow price increases or quality reductions.

The European Commission had previously noted these risks and the firms had signed a non-binding memorandum of understanding in December, with a final agreement signed in May. The Commission now intends to block the arrangement.