Sappi, UPM offer remedies to win EU antitrust approval for paper joint venture

By Foo Yun Chee and Sudip Kar-Gupta

BRUSSELS, Nov 5 (Reuters) - Finland's UPM-Kymmene and South Africa-listed Sappi said on Thursday they have offered to modify their production capacities as part of remedies aimed at securing EU antitrust approval for their €1.42 billion ($1.6 billion) paper joint venture.

The companies submitted their offer to the European Commission, the EU competition enforcer, on Wednesday, according to a filing on its website. The offer led the regulator to extend its decision deadline to January 8.

The remedies "include capacity optimisation for the supply of certain paper grades in Europe" and "certain commercial safeguards for customers, and investments in decarbonisation, electrification and energy efficiency", UPM and Sappi said in their joint statement on Thursday.

The Commission usually seeks feedback from rivals and customers on concessions to address competition concerns before deciding whether to accept them or demand more.

The deal to combine UPM's communication paper business in Europe and the US with Sappi's communication paper business in Europe and specialty paper business and other ancillary activities would create the biggest player in Europe.

The EU antitrust enforcer has said that the deal may restrict competition in the markets for different types of communication paper used for magazines and books.

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(Reporting by Foo Yun Chee and Sudip Kar-Gupta; Editing by Philip Blenkinsop and Emelia Sithole-Matarise)