The European Commission (Commission) has approved the acquisition of Myllykoski Corporation, a Finnish company active in manufacturing paper products and pulp, by UPM-Kymmene Corporation, a worldwide company based in Finland and active in making paper products, pulp, electricity, label-stock, sawn timber and panel products.
The Commission had initial concerns about the high market shares that would result in relation to magazine paper and, in particular, supercalendered paper (SC). A Phase II in-depth investigation was opened in March 2011.
Following its analysis, the Commission concluded that the transaction did not raise competition concerns: generally, the parties' competitors were found to have significant spare capacity which would enable them to react to any attempt by the merged firm to raise prices and the demand for magazine paper was forecast to remain stable if not slightly decline, meaning sufficient future capacity in the market. The Commission also found that recent market entrants already impose significant competitive pressure on the parties (new SC-B paper already competes directly with one type of SC paper) and this pressure is expected to increase in the future.