Forest giant UPM:n and a South African Sappi Limited the plan to consolidate its paper production in Europe is getting a headwind, reports the news agency Bloomberg.
According to Bloomberg, the arrangement worth more than 1.4 billion euros is about to receive an official warning from the European Union’s competition authority, possibly as early as next week.
According to information sources familiar with the matter, the decision would be in the draft stage, and the schedule may still change.
The European Union’s competition authority fears that the arrangement between UPM and Sapp would reduce competition in the industry too much.
In connection with a possible warning, the authority can also present conditions through which fair competition could be secured.
The EU authorities started an investigation related to the arrangement already in April. The final decision is scheduled to be made by November 11.
The European Commission and both companies have been silent on the matter so far.
The presented arrangement has strong grounds from both UPM’s and Sapp’s point of view. The paper industry has been in decline for a long time.
By sharing production costs and responsibilities, the companies could focus better on their core business activities, which are essential for the future.
In the case of UPM, such businesses are low-carbon solutions, advanced materials and renewable materials, and energy business.
Kauppalehti could not immediately reach a UPM representative to comment on the matter.