UPM and Sappi have signed a non-binding letter of intent to method a vivid paper Joint Mission

UPM-Kymmene Company Reserve Trade Let fall December 4, 2025 at 11.45 EET

HELSINKI, Dec. 4, 2025 /PRNewswire/ — UPM-Kymmene Company (“UPM”) and Sappi Restricted (“Sappi”) have signed a non-binding letter of intent to method a vivid paper three way partnership (“the Joint Venture”). The Joint Mission would come with all of the UPM Communique Papers trade and Sappi’s vivid paper trade in Europe. The Joint Mission could be owned 50/50 via UPM and Sappi. It could function as an separate corporate, managing its personal operations, sources, and selections inside of assuredly shareholder barriers.

“The proposed Joint Venture represents a decisive response to the structural changes in the European graphic paper industry. It would offer a path to strengthen the resilience of the industry and provide long-term commitment and supply security to graphic paper customers,” says Massimo Reynaudo, President and CEO of UPM.

 “UPM Communication Papers has reliably delivered value to customers as well as UPM shareholders. It has been the foundation upon which UPM has expanded its broad portfolio of sustainable material solutions. The planned Joint Venture would provide the best future for the UPM Communication Papers business, focus UPM’s portfolio and strengthen our balance sheet,” says Reynaudo.

Securing long-term resilience and sustainability

The transaction would assemble a extra environment friendly, adaptable and sustainable vivid paper trade. It could assemble a structurally aggressive value bottom and provide safety for the Ecu and international shoppers.

By way of strategic reallocation of manufacturing volumes to the best paper machines, the Joint Mission would succeed in extra sustainable capability usage and more potent operational efficiency, occasion proceeding to grant shoppers with a extensive portfolio of vivid paper merchandise.

Total, the Joint Mission would rationalize provide in an trade harassed via declining call for, structural overcapacity and prime power prices. It could give a contribution to a extra balanced and resilient Ecu marketplace, and create the trade higher located to resist marketplace demanding situations and lengthening imports to Europe.

UPM Communique Papers has already nowadays an aspiring environment motion roadmap to shed product emissions via as much as 70% via 2030, supporting shoppers achieve their environment objectives. The Joint Mission would additional strengthen those alternatives. By way of optimizing capability usage, improving operational efficiencies and proceeding to put money into decarbonization, the Joint Mission may just shed its total environment have an effect on, serving to to exit the EU’s Blank Commercial Trade in goals.

Transaction evaluate and phrases

The proposed Joint Mission could be owned 50/50 via UPM and Sappi and function as an separate corporate.

The deliberate perimeter of the Joint Mission would come with:

–  All of the UPM Communique Papers trade, together with 8 UPM Communique Papers’ paper turbines at Kymi, Rauma (together with UPM RaumaCell) and Jämsänkoski (paper form 6) in Finland; Nordland (paper strains 1 and four), Augsburg, Schongau in Germany; UPM Caledonian paper mill in the United Kingdom and Blandin paper mill in the US; and

–  Sappi’s Ecu vivid paper trade, together with please see 4 vivid paper turbines: Kirkniemi in Finland, Ehingen in Germany, Gratkorn in Austria and Maastricht within the Netherlands.

The Joint Mission is predicted to assemble annual synergies estimated at about €100 million via asset optimization, product portfolio clarification, logistics optimizations, sourcing potency enhancements and operational efficiencies.

In line with the letter of intent

–  UPM and Sappi would give a contribution their respective companies and belongings to the Joint Mission with a blended endeavor worth of €1,420 million, apart from the worth of anticipated synergy advantages.

–  UPM Communique Papers trade is valued at €1,100 million (endeavor worth). UPM would obtain money proceeds of €613 million and 50% shareholding within the Joint Mission.

–  Sappi’s Ecu trade is valued at €320 million (endeavor worth). Sappi would obtain money proceeds of €139 million and 50% shareholding within the Joint Mission.

On the endmost of the transaction, the Joint Mission would lift debt to investmrent the acquisition costs payable to Sappi and UPM respectively. The Joint Mission could be independently financed and to the level it might require spare investment going forward, it will likely be with none recourse to the shareholders. 

The Joint Mission would distribute dividends to its two shareholders consistent with its monetary efficiency and status. 

The status quo of the Joint Mission would assemble a sustainable standalone trade that in the long run will handover divestment flexibility for each shareholders. 3 years upcoming endmost, with the Joint Mission anticipated to have finished the mixing and learned the synergies, both shareholder would possibly begin a divestment in their shareholding. 

Have an effect on of the transaction on UPM financials

The monetary receive advantages for UPM at endmost would come with the €613 million money fee to UPM via the Joint Mission, €406 million switch of pension liabilities to the Joint Mission and UPM’s percentage (50%) of the Joint Mission. The valuations and fiscal have an effect on of the transaction are estimates on the date of the letter of intent, and matter to commonplace changes. 

The valuation of UPM Communique Papers trade at €1.1 billion is the same as a more than one of four.6x EBITDA of endmost reported twelve months (This autumn/2024-Q3/2025).

The UPM Communique Papers belongings to be transferred to the Joint Mission constitute not up to 10% of UPM’s general belongings.

The possession within the Joint Mission could be accounted for the usage of the fairness form.

The transaction is predicted to have a favorable have an effect on on UPM’s profitability margins (EBIT % of gross sales), stability sheet and leverage. UPM would additionally succeed in a extra targeted trade portfolio working on expansion markets and would not have direct gross sales publicity to the declining Ecu and North American vivid paper markets.

The desk underneath summarizes the important thing figures of UPM Workforce and UPM Communique Papers, and UPM Workforce apart from the UPM Communique Papers.

1)  excl. UPM Communique Papers working capital hired

The tables display UPM key figures as reported and apart from UPM Communique Papers. The figures don’t come with the have an effect on of inauguration the three way partnership, any transaction prices, synergies or dis-synergies or venture prices.

Transaction matter to merger regulate and alternative statuses

Negotiations relating to the main points of the Joint Mission are ongoing, and the events be expecting the definitive oaths to be signed all through the primary part of 2026. The definitive oaths require the of entirety of exterior financing oaths, Sappi shareholder kindness and alternative statuses.

The proposed transaction is matter to study via the Ecu Fee and the related merger regulate and kindness via the government in alternative jurisdictions corresponding to the USA, UK and China. The events are dedicated to operating with the regulatory government all the way through the overview procedure. 

It’s recently anticipated that the endmost would pluck park via the top of 2026, matter to regulatory approvals and alternative endmost statuses. The Joint Mission would grow to be operational upon endmost.

UPM Communique Papers and Sappi’s Ecu vivid paper trade will proceed to function as free and separate corporations and govern their respective companies till the endmost of the meant Joint Mission consistent with the delight of all felony and regulatory necessities.
 

Invitation to UPM’s webcast

A webcast and a convention name for analysts and buyers will start at 14:00 EET. There can be a presentation in English via President and CEO Massimo Reynaudo and CFO Tapio Korpeinen. Individuals can apply the webcast on-line by means of this link.

Individuals wishing to invite questions upcoming the presentation will have to sign in for the convention name. To take part within the convention name, please register here. Next registering, you’ll be supplied with phone numbers, a person ID and a convention ID to get right of entry to the decision. To invite a query, press *5 for your phone keypad to tied the queue.

The webcast can be to be had at www.upm.com for twelve months upcoming the decision.

UPM, Media members of the family
Mon-Fri 9:00–16:00 EET
tel. +358 40 588 3284
[email protected]

UPM
UPM is a subject matter answers corporate, renewing merchandise and whole worth chains with an in depth portfolio of renewable threads, complicated fabrics, decarbonization answers, and conversation papers. Our efficiency in sustainability has been identified via 3rd events, together with EcoVadis and the Dow Jones Sustainability Indices. We function globally and make use of roughly 15,800 nation international, with annual gross sales of roughly €10.3 billion. Our stocks are indexed on Nasdaq Helsinki Ltd.

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