{"success":true,"data":{"pressRelease":{"id":"47364","rtpr_id":"nWkr5LbHCF","ticker":"UPM","exchange":"Nasdaq Helsinki","all_tickers":["UPM"],"title":"Inside information: UPM and Sappi have signed a definitive agreement on the graphic paper Joint Venture","author":"Cision","published_at":"2026-05-28T06:27:37.394Z","article_body":"UPM-Kymmene Oyj\nInside information: UPM and Sappi have signed a definitive agreement on the\ngraphic paper Joint Venture\n\nUPM-Kymmene Corporation Stock Exchange Release (Inside information) May 28,\n2026 at 9:30 EEST\n\nUPM has today signed a definitive agreement to form a graphic paper Joint\nVenture with Sappi, and the parties have secured financing arrangements that\nwill provide a robust financial standing for the Joint Venture. A non-binding\nletter of intent (LOI) on the transaction was signed on December 4, 2025.\n\nAs earlier announced, the planned Joint Venture will include the entire UPM\nCommunication Papers business and Sappi’s graphic paper business in Europe.\nThe Joint Venture will be owned 50/50 by UPM and Sappi. It will operate as an\nindependent company, managing its own operations, resources, and decisions\nwithin agreed shareholder boundaries.\n\n“The definitive agreement is an important milestone in creating the planned\nJoint Venture that we see as a necessary step to secure long-term commitment\nand supply continuity for graphic paper customers in Europe and strengthen the\nresilience of the entire European graphic paper industry,” says Massimo\nReynaudo, President and CEO of UPM.\n\nFollowing this milestone, the parties will start planning to ensure\noperational readiness of the Joint Venture from day one. Until the closing of\nthe intended Joint Venture according to the satisfaction of all legal and\nregulatory requirements, UPM Communication Papers and Sappi’s European\ngraphic paper business will continue to operate as separate and independent\ncompanies.\n\nThe Joint Venture is expected to create annual synergies estimated at about\n€100 million through asset and logistics optimizations, product portfolio\nrationalization, sourcing efficiency improvements and operational\nefficiencies.\n\nFinancing secured for the Joint Venture:\n* The parties have secured €600 million of external financing for the\ntransaction as well as a committed revolving credit facility of €100 million\nto finance the Joint Venture’s operational liquidity needs, both facilities\nfully underwritten by Citi and Nordea.\n* At the closing of the transaction, the Joint Venture will raise the agreed\ndebt to fund the cash consideration payable to UPM and Sappi respectively. To\nensure adequate equity and balance sheet for the Joint Venture, the parties\nhave agreed that a part of the purchase prices will be financed through\nshareholder loans as explained below in further detail.\n* Except for the shareholder loans, the Joint Venture will be independently\nfinanced following the closing, and to the extent it would require additional\nfunding, such financing shall be without any recourse to the shareholders.\nBased on the definitive agreement:\n* UPM and Sappi will contribute their respective businesses and assets to the\nJoint Venture with a combined enterprise value of €1,420 million, excluding\nthe value of expected synergy benefits. UPM Communication Papers business is\nvalued at €1,100 million (enterprise value). Sappi’s European business is\nvalued at €320 million (enterprise value).\n* As consideration for its assets contributed to the planned Joint Venture, at\nclosing UPM will receive cash proceeds of €475 million, a receivable for a\nshareholder loan on preferential terms valued at €88 million, a receivable\nfor an additional shareholder loan valued at €10 million and 50% of the\nequity of the Joint Venture equal to a book value of €167 million. As part\nof the transferring business perimeter, €411 million of net pension and\nother liabilities based on year-end 2025 balance sheet will transfer to the\nJoint Venture.\n* Sappi will receive cash proceeds of €90 million, a receivable of a\nshareholder loan valued at €10 million and 50% of the equity of the Joint\nVenture equal to a book value of €167 million.\nThe purchase prices, cash proceeds and financial impact of the transaction are\nestimates at the time of the definitive agreement, and subject to customary\npurchase price adjustments.\n\nThe Joint Venture will first repay its shareholder loans to its two\nshareholders and thereafter distribute dividends according to its financial\nperformance and standing. The parties have agreed that UPM has an option to\nsell to Sappi half of any outstanding preferential terms shareholder loan two\nyears after closing.\n\nThe establishment of the Joint Venture would create a sustainable standalone\nbusiness that ultimately will provide divestment flexibility for both\nshareholders. Three years after closing, with the Joint Venture expected to\nhave completed the integration and realized the synergies, either shareholder\nmay initiate a divestment of their shareholdings.\n\nImpact of the transaction on UPM financials\n\nThe financial benefit for UPM at closing will consist of the €475 million\ncash payment to UPM by the Joint Venture, the €98 million shareholder loan\nreceivable and UPM’s share (50%) of the Joint Venture. In addition, €411\nmillion of net pension and other liabilities will transfer to the Joint\nVenture as part of the transferring business perimeter.\n\nThe ownership in the Joint Venture will be accounted for using the equity\nmethod, below operating profit.\n\nThe transaction is expected to have a positive impact on UPM’s profitability\nmargins (EBIT % of sales), balance sheet and leverage. UPM would also achieve\na more focused business portfolio operating on growth markets and would no\nlonger have direct sales exposure to the declining European and North American\ngraphic paper markets.\n\nThe table below summarizes the key figures of UPM Group and UPM Communication\nPapers, and UPM Group excluding UPM Communication Papers.\n\n € million                     UPM       UPM Communication Papers 2025  UPM excl. UPM Communication Papers 2025  \n                                Group                                                                            \n                                2025                                                                             \n Sales                         9 656     2 493                          7 628                                    \n Comparable EBITDA             1 311     241                            1 070                                    \n % of sales                    13.6%     9.7%                           14.0%                                    \n Operating profit              749       107                            643                                      \n % of sales                    7.8%      4.3%                           8.4%                                     \n Comparable EBIT               921       181                            739                                      \n % of sales                    9.5%      7.3%                           9.7%                                     \n Capital employed, period end  14 129    891                            13 238                                   \n Comparable ROCE, %            6.7%      17.8%                          5.8%                                     \n\n \n\nTransaction subject to merger control and other conditions\n\nThe transaction requires among other conditions approval by Sappi Limited’s\nshareholders and is also subject to merger control approval by the European\nCommission and authorities in other jurisdictions such as the US and China,\nwith final resolutions expected by the end of 2026. The Joint Venture would\nbecome operational upon closing. As announced on April 28, 2026, the review of\nthe Joint Venture proceeded to Phase II of EU merger control. UPM continues to\nengage openly and constructively with the European Commission during the\nsecond part of the process.\n\n \n\nUPM, Media relations\nMon-Fri 9:00–16:00 EEST\ntel. +358 40 588 3284\nmedia@upm.com\n\nUPM\nUPM is a material solutions company, renewing products and entire value chains\nwith an extensive portfolio of renewable fibres, advanced materials,\ndecarbonization solutions, and communication papers. Our performance in\nsustainability has been recognized by third parties, including EcoVadis and\nthe Dow Jones Sustainability Indices. We operate globally and employ\napproximately 15,100 people worldwide, with annual sales of approximately\n€9.7 billion. Our shares are listed on Nasdaq Helsinki Ltd.\nUPM – we renew the everyday\nRead more: upm.com (http://www.upm.com)\n\nFollow us on LinkedIn\n(https://www.linkedin.com/company/upm-kymmene) | YouTube\n(https://www.youtube.com/user/upmdotcom) | Instagram\n(https://www.instagram.com/upmworld/) | #UPM #materialsolutions\n#WeRenewTheEveryday \n\nhttps://news.cision.com/upm-kymmene-oyj/r/inside-information--upm-and-sappi-have-signed-a-definitive-agreement-on-the-graphic-paper-joint-vent%2Cc4353868\n\n\n\n(c) Copyright Waymaker BIT News - Cision 2026","article_body_html":"","raw_payload":{"data":{"id":"nWkr5LbHCF","title":"Inside information: UPM and Sappi have signed a definitive agreement on the graphic paper Joint Venture","author":"Cision","ticker":"UPM","created":"2026-05-28T06:27:37.394Z","tickers":["UPM"],"exchange":"Nasdaq Helsinki","article_body":"UPM-Kymmene Oyj\nInside information: UPM and Sappi have signed a definitive agreement on the\ngraphic paper Joint Venture\n\nUPM-Kymmene Corporation Stock Exchange Release (Inside information) May 28,\n2026 at 9:30 EEST\n\nUPM has today signed a definitive agreement to form a graphic paper Joint\nVenture with Sappi, and the parties have secured financing arrangements that\nwill provide a robust financial standing for the Joint Venture. A non-binding\nletter of intent (LOI) on the transaction was signed on December 4, 2025.\n\nAs earlier announced, the planned Joint Venture will include the entire UPM\nCommunication Papers business and Sappi’s graphic paper business in Europe.\nThe Joint Venture will be owned 50/50 by UPM and Sappi. It will operate as an\nindependent company, managing its own operations, resources, and decisions\nwithin agreed shareholder boundaries.\n\n“The definitive agreement is an important milestone in creating the planned\nJoint Venture that we see as a necessary step to secure long-term commitment\nand supply continuity for graphic paper customers in Europe and strengthen the\nresilience of the entire European graphic paper industry,” says Massimo\nReynaudo, President and CEO of UPM.\n\nFollowing this milestone, the parties will start planning to ensure\noperational readiness of the Joint Venture from day one. Until the closing of\nthe intended Joint Venture according to the satisfaction of all legal and\nregulatory requirements, UPM Communication Papers and Sappi’s European\ngraphic paper business will continue to operate as separate and independent\ncompanies.\n\nThe Joint Venture is expected to create annual synergies estimated at about\n€100 million through asset and logistics optimizations, product portfolio\nrationalization, sourcing efficiency improvements and operational\nefficiencies.\n\nFinancing secured for the Joint Venture:\n* The parties have secured €600 million of external financing for the\ntransaction as well as a committed revolving credit facility of €100 million\nto finance the Joint Venture’s operational liquidity needs, both facilities\nfully underwritten by Citi and Nordea.\n* At the closing of the transaction, the Joint Venture will raise the agreed\ndebt to fund the cash consideration payable to UPM and Sappi respectively. To\nensure adequate equity and balance sheet for the Joint Venture, the parties\nhave agreed that a part of the purchase prices will be financed through\nshareholder loans as explained below in further detail.\n* Except for the shareholder loans, the Joint Venture will be independently\nfinanced following the closing, and to the extent it would require additional\nfunding, such financing shall be without any recourse to the shareholders.\nBased on the definitive agreement:\n* UPM and Sappi will contribute their respective businesses and assets to the\nJoint Venture with a combined enterprise value of €1,420 million, excluding\nthe value of expected synergy benefits. UPM Communication Papers business is\nvalued at €1,100 million (enterprise value). Sappi’s European business is\nvalued at €320 million (enterprise value).\n* As consideration for its assets contributed to the planned Joint Venture, at\nclosing UPM will receive cash proceeds of €475 million, a receivable for a\nshareholder loan on preferential terms valued at €88 million, a receivable\nfor an additional shareholder loan valued at €10 million and 50% of the\nequity of the Joint Venture equal to a book value of €167 million. As part\nof the transferring business perimeter, €411 million of net pension and\nother liabilities based on year-end 2025 balance sheet will transfer to the\nJoint Venture.\n* Sappi will receive cash proceeds of €90 million, a receivable of a\nshareholder loan valued at €10 million and 50% of the equity of the Joint\nVenture equal to a book value of €167 million.\nThe purchase prices, cash proceeds and financial impact of the transaction are\nestimates at the time of the definitive agreement, and subject to customary\npurchase price adjustments.\n\nThe Joint Venture will first repay its shareholder loans to its two\nshareholders and thereafter distribute dividends according to its financial\nperformance and standing. The parties have agreed that UPM has an option to\nsell to Sappi half of any outstanding preferential terms shareholder loan two\nyears after closing.\n\nThe establishment of the Joint Venture would create a sustainable standalone\nbusiness that ultimately will provide divestment flexibility for both\nshareholders. Three years after closing, with the Joint Venture expected to\nhave completed the integration and realized the synergies, either shareholder\nmay initiate a divestment of their shareholdings.\n\nImpact of the transaction on UPM financials\n\nThe financial benefit for UPM at closing will consist of the €475 million\ncash payment to UPM by the Joint Venture, the €98 million shareholder loan\nreceivable and UPM’s share (50%) of the Joint Venture. In addition, €411\nmillion of net pension and other liabilities will transfer to the Joint\nVenture as part of the transferring business perimeter.\n\nThe ownership in the Joint Venture will be accounted for using the equity\nmethod, below operating profit.\n\nThe transaction is expected to have a positive impact on UPM’s profitability\nmargins (EBIT % of sales), balance sheet and leverage. UPM would also achieve\na more focused business portfolio operating on growth markets and would no\nlonger have direct sales exposure to the declining European and North American\ngraphic paper markets.\n\nThe table below summarizes the key figures of UPM Group and UPM Communication\nPapers, and UPM Group excluding UPM Communication Papers.\n\n € million                     UPM       UPM Communication Papers 2025  UPM excl. UPM Communication Papers 2025  \n                                Group                                                                            \n                                2025                                                                             \n Sales                         9 656     2 493                          7 628                                    \n Comparable EBITDA             1 311     241                            1 070                                    \n % of sales                    13.6%     9.7%                           14.0%                                    \n Operating profit              749       107                            643                                      \n % of sales                    7.8%      4.3%                           8.4%                                     \n Comparable EBIT               921       181                            739                                      \n % of sales                    9.5%      7.3%                           9.7%                                     \n Capital employed, period end  14 129    891                            13 238                                   \n Comparable ROCE, %            6.7%      17.8%                          5.8%                                     \n\n \n\nTransaction subject to merger control and other conditions\n\nThe transaction requires among other conditions approval by Sappi Limited’s\nshareholders and is also subject to merger control approval by the European\nCommission and authorities in other jurisdictions such as the US and China,\nwith final resolutions expected by the end of 2026. The Joint Venture would\nbecome operational upon closing. As announced on April 28, 2026, the review of\nthe Joint Venture proceeded to Phase II of EU merger control. UPM continues to\nengage openly and constructively with the European Commission during the\nsecond part of the process.\n\n \n\nUPM, Media relations\nMon-Fri 9:00–16:00 EEST\ntel. +358 40 588 3284\nmedia@upm.com\n\nUPM\nUPM is a material solutions company, renewing products and entire value chains\nwith an extensive portfolio of renewable fibres, advanced materials,\ndecarbonization solutions, and communication papers. Our performance in\nsustainability has been recognized by third parties, including EcoVadis and\nthe Dow Jones Sustainability Indices. We operate globally and employ\napproximately 15,100 people worldwide, with annual sales of approximately\n€9.7 billion. Our shares are listed on Nasdaq Helsinki Ltd.\nUPM – we renew the everyday\nRead more: upm.com (http://www.upm.com)\n\nFollow us on LinkedIn\n(https://www.linkedin.com/company/upm-kymmene) | YouTube\n(https://www.youtube.com/user/upmdotcom) | Instagram\n(https://www.instagram.com/upmworld/) | #UPM #materialsolutions\n#WeRenewTheEveryday \n\nhttps://news.cision.com/upm-kymmene-oyj/r/inside-information--upm-and-sappi-have-signed-a-definitive-agreement-on-the-graphic-paper-joint-vent%2Cc4353868\n\n\n\n(c) Copyright Waymaker BIT News - Cision 2026"},"type":"article","timestamp":"2026-05-28T06:27:37.49233679Z","server_sent_at_ms":1779949657492},"received_at":"2026-05-28T06:27:37.555Z","source_url":"https://news.cision.com/upm-kymmene-oyj/r/inside-information--upm-and-sappi-have-signed-a-definitive-agreement-on-the-graphic-paper-joint-vent%2Cc4353868"},"analysis":{"id":"36798","press_release_id":"47364","analysis_json":{"industry":{"label":"Paper & Forest Products","sector":"Materials"},"redFlags":["Transaction subject to Phase II EU merger control review, adding regulatory uncertainty and potential delay","Closing expected by end of 2026, meaning financial benefits are not immediate"],"eventType":"m_and_a","narrative":"UPM and Sappi have signed a definitive agreement to form a 50/50 joint venture combining their European graphic paper businesses, with a combined enterprise value of €1.42 billion.\n\nUPM will receive €475 million in cash, €98 million in shareholder loans, and a 50% equity stake (book value €167 million), while transferring €411 million in pension and other liabilities to the new entity.\n\nThe deal is expected to generate €100 million in annual synergies and improve UPM’s pro-forma EBIT margin from 7.8% to 8.4%, allowing the company to exit the declining graphic paper market while retaining a stake in the optimized business.\n\nThe transaction is subject to regulatory approvals, including Phase II EU merger control, with closing expected by the end of 2026.","sentiment":"bullish","agentHooks":{"shouldPost":true,"suggestedAngle":"UPM locks definitive JV deal with Sappi to spin off declining graphic paper unit, boosting margins and unlocking €100M in synergies."},"keyFigures":{"dealValueUsd":1420000000,"customDimensions":{"annual_synergies":100000000,"upm_cash_proceeds":475000000,"external_financing":600000000,"upm_business_value":1100000000,"sappi_business_value":320000000,"upm_shareholder_loan":98000000,"upm_equity_book_value":167000000,"liabilities_transferred":411000000,"revolving_credit_facility":100000000,"upm_group_ebit_margin_2025":"7.8%","upm_excl_comm_papers_ebit_margin_2025":"8.4%"}},"quotedText":"The definitive agreement is an important milestone in creating the planned Joint Venture that we see as a necessary step to secure long-term commitment and supply continuity for graphic paper customers in Europe and strengthen the resilience of the entire European graphic paper industry","namedEntities":{"people":[{"name":"Massimo Reynaudo","role":"President and CEO of UPM"}],"products":["graphic paper","Communication Papers"],"companies":[{"name":"UPM-Kymmene Corporation","ticker":"UPM","relationship":"filer"},{"name":"Sappi","ticker":"SAP","relationship":"partner"},{"name":"Citi","relationship":"underwriter"},{"name":"Nordea","relationship":"underwriter"},{"name":"European Commission","relationship":"regulator"}],"dollarAmounts":[{"amount":"€1,420 million","context":"combined enterprise value of the Joint Venture"},{"amount":"€1,100 million","context":"enterprise value of UPM Communication Papers business"},{"amount":"€320 million","context":"enterprise value of Sappi’s European business"},{"amount":"€475 million","context":"cash proceeds to UPM"},{"amount":"€88 million","context":"preferential shareholder loan receivable for UPM"},{"amount":"€10 million","context":"additional shareholder loan receivable for UPM"},{"amount":"€167 million","context":"book value of 50% equity stake in JV for each shareholder"},{"amount":"€411 million","context":"net pension and other liabilities transferred to JV"},{"amount":"€90 million","context":"cash proceeds to Sappi"},{"amount":"€100 million","context":"annual synergies estimated"},{"amount":"€600 million","context":"external financing secured"},{"amount":"€100 million","context":"revolving credit facility"}]},"materialImpact":{"score":4,"reasoning":"Definitive agreement for a major strategic JV divesting a declining business unit (Communication Papers). The deal unlocks ~€100M in annual synergies, improves UPM's margin profile (EBIT margin rising from 7.8% to 8.4% on a pro-forma basis), and removes exposure to the declining graphic paper market. While regulatory approval is pending (Phase II EU review), the financial terms are locked and the strategic benefit is clear."},"tickerRelevance":{"others":[{"ticker":"SAP","relevance":"partner"}],"primary":"UPM"},"globalImportance":45,"audienceRelevance":30,"eventTypeSecondary":["partnership"],"importanceComponents":{"tickerTier":"large-cap","eventGravity":"strategic_jv_divestiture","sectorWeight":"materials","householdBrandBoost":"low","marketCapAdjustment":"neutral","retailFavoriteBoost":"none"}},"event_type":"m_and_a","event_type_secondary":["partnership"],"sentiment":"bullish","material_impact_score":4,"narrative":"UPM and Sappi have signed a definitive agreement to form a 50/50 joint venture combining their European graphic paper businesses, with a combined enterprise value of €1.42 billion.\n\nUPM will receive €475 million in cash, €98 million in shareholder loans, and a 50% equity stake (book value €167 million), while transferring €411 million in pension and other liabilities to the new entity.\n\nThe deal is expected to generate €100 million in annual synergies and improve UPM’s pro-forma EBIT margin from 7.8% to 8.4%, allowing the company to exit the declining graphic paper market while retaining a stake in the optimized business.\n\nThe transaction is subject to regulatory approvals, including Phase II EU merger control, with closing expected by the end of 2026.","key_figures":{"dealValueUsd":1420000000,"customDimensions":{"annual_synergies":100000000,"upm_cash_proceeds":475000000,"external_financing":600000000,"upm_business_value":1100000000,"sappi_business_value":320000000,"upm_shareholder_loan":98000000,"upm_equity_book_value":167000000,"liabilities_transferred":411000000,"revolving_credit_facility":100000000,"upm_group_ebit_margin_2025":"7.8%","upm_excl_comm_papers_ebit_margin_2025":"8.4%"}},"named_entities":{"people":[{"name":"Massimo Reynaudo","role":"President and CEO of UPM"}],"products":["graphic paper","Communication Papers"],"companies":[{"name":"UPM-Kymmene Corporation","ticker":"UPM","relationship":"filer"},{"name":"Sappi","ticker":"SAP","relationship":"partner"},{"name":"Citi","relationship":"underwriter"},{"name":"Nordea","relationship":"underwriter"},{"name":"European Commission","relationship":"regulator"}],"dollarAmounts":[{"amount":"€1,420 million","context":"combined enterprise value of the Joint Venture"},{"amount":"€1,100 million","context":"enterprise value of UPM Communication Papers business"},{"amount":"€320 million","context":"enterprise value of Sappi’s European business"},{"amount":"€475 million","context":"cash proceeds to UPM"},{"amount":"€88 million","context":"preferential shareholder loan receivable for UPM"},{"amount":"€10 million","context":"additional shareholder loan receivable for UPM"},{"amount":"€167 million","context":"book value of 50% equity stake in JV for each shareholder"},{"amount":"€411 million","context":"net pension and other liabilities transferred to JV"},{"amount":"€90 million","context":"cash proceeds to Sappi"},{"amount":"€100 million","context":"annual synergies estimated"},{"amount":"€600 million","context":"external financing secured"},{"amount":"€100 million","context":"revolving credit facility"}]},"model_name":"qwen3_6_27b_awq","prompt_hash":"sha256:727b4b9429a443af","schema_hash":"sha256:05005c02d9cffac9","created_at":"2026-05-28T06:29:21.304Z","global_importance":45,"audience_relevance":30,"importance_components":{"tickerTier":"large-cap","eventGravity":"strategic_jv_divestiture","sectorWeight":"materials","householdBrandBoost":"low","marketCapAdjustment":"neutral","retailFavoriteBoost":"none"}},"durationMs":103742,"modelName":"george-droid-qwen-72b"}}