EU antitrust veto reportedly looms over UPM-Sappi paper venture

UPM and Sappi may face a European Union antitrust veto of their proposed graphic paper joint venture, according to a Reuters report citing people familiar with the matter. The outcome has not yet been formally decided: the European Commission is due to rule on the transaction by 11 November 2026.

Reuters reported that the companies had not offered concessions to address the Commission’s competition concerns and had not persuaded regulators at a closed-door hearing. The agency said difficulties in finding a buyer for potential divestments had complicated a possible remedy. UPM and Sappi declined to comment to Reuters, while the Commission did not immediately respond to its request.

The proposed €1.42 billion venture would bring together UPM’s communication paper business in Europe and the United States with Sappi’s communication paper business in Europe, as well as Sappi’s specialty paper business and certain ancillary operations. It would create a major supplier of graphic papers in Europe.

The Commission sent the companies a statement of objections in August, expressing its preliminary view that the deal could reduce competition in several graphic paper markets, including products used for magazines and books. Its concerns include the possibility of higher prices for customers.

UPM and Sappi signed definitive transaction agreements in May 2026 and have since conditionally nominated a management team for the planned company. Those appointments, like completion of the venture, depend on regulatory approval and other closing conditions. Until any transaction closes, the two businesses continue to operate independently.

The reported prospect of a veto is a further development in the review, rather than an official prohibition.