UPM, Sappi Form Graphic Paper Joint Venture
Analysis based on 6 articles · First reported May 28, 2026 · Last updated May 28, 2026
The formation of this Joint Venture between UPM and Sappi is expected to create annual synergies of approximately 100 million euros, positively impacting the profitability and balance sheets of both companies. It also aims to strengthen the resilience of the European graphic paper industry, providing long-term commitment and supply continuity for customers. The transaction is expected to have a positive impact on UPM's profitability margins, balance sheet, and leverage, and will allow UPM to focus on growth markets.
UPM and Sappi have signed a definitive agreement to form a 50/50 graphic paper Joint Venture, combining UPM Communication Papers business and Sappi's European graphic paper business. The Joint Venture, with a combined enterprise value of 1,420 million euros, aims to create annual synergies of approximately 100 million euros through asset and logistics optimizations, product portfolio rationalization, sourcing efficiency improvements, and operational efficiencies. The parties have secured 600 million euros in external financing and a 100 million euros revolving credit facility, underwritten by Citigroup and Nordea. UPM will receive 475 million euros in cash proceeds and 98 million euros in shareholder loans, while Sappi will receive 90 million euros in cash proceeds and a 10 million euros shareholder loan. The transaction is subject to approval by Sappi's shareholders and merger control approvals from the International — European Commission, the United States, and China, with final resolutions expected by the end of 2026.
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