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Inside information: UPM and Sappi have signed a definitive agreement on the graphic paper Joint Venture
Inside information: UPM and Sappi have signed a definitive agreement on the graphic paper Joint
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[{"type":"text","content":"Inside information: UPM and Sappi have signed a definitive agreement on the graphic paper Joint VentureUPM-Kymmene Corporation Stock Exchange Release (Inside information) May 28, 2026 at 9:30 EEST\n\nUPM has today signed a definitive agreement to form a graphic paper Joint Venture with Sappi, and the parties have secured financing arrangements that will provide a robust financial standing for the Joint Venture. A non-binding letter 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 Communication Papers business and Sappi's graphic paper business in Europe. The Joint Venture will be owned 50/50 by UPM and Sappi. It will operate as an independent company, managing its own operations, resources, and decisions within agreed shareholder boundaries. \n\n\"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,\" says Massimo Reynaudo, President and CEO of UPM.\n\nFollowing this milestone, the parties will start planning to ensure operational readiness of the Joint Venture from day one. Until the closing of the intended Joint Venture according to the satisfaction of all legal and regulatory requirements, UPM Communication Papers and Sappi's European graphic paper business will continue to operate as separate and independent companies.\n\nThe Joint Venture is expected to create annual synergies estimated at about E100 million through asset and logistics optimizations, product portfolio rationalization, sourcing efficiency improvements and operational efficiencies.\n\nFinancing secured for the Joint Venture:The parties have secured E600 million of external financing for the transaction as well as a committed revolving credit facility of E100 million to finance the Joint Venture's operational liquidity needs, both facilities fully underwritten by Citi and Nordea.\n\tAt the closing of the transaction, the Joint Venture will raise the agreed debt to fund the cash consideration payable to UPM and Sappi respectively. To ensure adequate equity and balance sheet for the Joint Venture, the parties have agree...