The European Commission said on Wednesday that it has raised objections to a planned joint venture between paper giants UPM and Sappi, warning the deal could harm competition in the European Economic Area.
The proposed tie-up between Finland’s UPM and South Africa’s Sappi would create the market leader in magazine, book and promotional paper products across the EEA.
However, the Commission said the venture could lead to higher prices, lower quality and less choice for customers. It opened an in-depth investigation into the deal on 28 April.
UPM and Sappi can now respond to the Commission’s statement of objections, examine the case file and request a hearing.
The Commission said sending the objections does not prejudge the outcome of the investigation. It has until 11 November to make a final decision.
Such objections are unusual in merger cases, as most notified deals do not raise competition concerns and are cleared after a routine review.
