UPM-Kymmene – Sappi joint venture

MN-30023

UPM-Kymmene Corporation (**UPM**) and Sappi Limited (**Sappi**) are proposing to create a 50:50 joint venture (**JV**) that will focus on the production and supply of communication paper. The JV will operate predominantly in the European Economic Area, with significant activities in the United Kingdom and the United States as well as exports to third countries, including Australia. Communication paper is paper designed for printing and writing. It is used in magazines, newspapers, catalogues, books, advertising materials, envelopes, and home and office paper. UPM is a Finnish-based global material solutions company that develops, produces, and markets a wide range of products including communication paper and specialty paper (i.e. paper products generally used in labelling and packaging applications). UPM supplies Australian customers with the following imported communication paper products: * newsprint * magazine paper (coated mechanical paper and supercalendered paper), and * fine paper (woodfree coated paper and woodfree uncoated paper). Sappi is a South African-based global manufacturer of everyday materials made from wood fibre-based renewable resources, including communication paper and speciality paper. Sappi supplies Australian customers with the following imported communication paper products: * magazine paper (coated mechanical paper only), and * fine paper (woodfree coated paper and woodfree uncoated paper). Neither UPM nor Sappi own or operate any paper mills in Australia. The JV will combine UPM’s European and United States communication paper business and Sappi’s European communication paper business (both UPM and Sappi will retain certain communication paper assets outside Europe). The JV will also have some limited ancillary activities in specialty paper (related to the supply of face material, wet glue label paper, paperboard and kraftliner) due to Sappi contributing part of its current European business activities in each of these products to the JV. UPM will not contribute any of its current specialty paper business to the JV.