UPM and Sappi establish a new joint company for graphic paper

UPM and Sappi are planning to merge their graphic paper businesses into a new joint venture (JV). The agreement encompasses twelve paper mills and aims to address the declining market demand, as well as create annual synergy effects of approximately 100 million euros. The parties announced this in a press release.

Through the merger, the companies aim to create a player with greater resilience to the structural challenges characterizing the paper market, where demand in Europe and North America has been falling over an extended period.

The primary goal of the agreement is to rationalize supply and manage the overcapacity existing in the industry. By optimizing production volumes and shifting them to the most efficient machines, the parties hope to reduce costs and increase competitiveness.

The planned joint venture company will include the entirety of UPM’s Communication Papers business area and Sappi’s European graphic paper business. In total, assets valued at 1.42 billion euros are included in the agreement.

From UPM, eight paper mills will be transferred, including the facilities in Kymi, Rauma, and Jämsänkoski in Finland, as well as mills in Germany, the UK, and the USA. Sappi will contribute four European mills, including Kirkniemi in Finland and Ehingen in Germany.

The Letter of Intent is non-binding, and a definitive agreement is expected to be signed during the first half of 2026.