Sappi Limited and UPM-Kymmene Corporation have announced plans to combine their European-based graphic paper businesses through a proposed 50/50 joint venture. The agreement, currently in the form of a non-binding letter of intent, is expected to be finalised in the first half of 2026, subject to regulatory approvals and other conditions. Completion is targeted by the end of 2026.
The new company will integrate Sappi’s European Graphic Paper business with UPM’s Communication Papers business across Europe, the UK, and the US. The move is intended to address declining demand in the graphic paper market, attributed to digitalisation, rising energy costs, and increased imports, particularly from Asia.
Sappi CEO Steve Binnie said the joint venture would provide “a focused business bringing the best assets and people together,” and enable Sappi to reduce its exposure to graphic papers to below 20% of its total sales volume.
The combined entity is valued at €1.42 billion, with UPM’s contribution valued at €1.1 billion and Sappi’s at €320 million. The joint venture is expected to deliver at least €100 million in annual synergies, driven by optimised capacity utilisation and operational efficiencies.
Marco Eikelenboom, CEO of Sappi Europe, noted that consolidation is necessary for competitiveness and supply security in the region. Both companies will provide transitional support to the new entity to ensure operational continuity and long-term viability.