According to a report in Swedish business title Affärs Välden (Business World) the two companies would combine the majority of their European papermaking operations, with UPM becoming the majority shareholder in the new venture with a 65% stake.
The
mooted move would create the world’s biggest paper company. It has been
speculated about for some time.
A
Reuters report last year stated: "A merger would improve profitability by
combining production facilities while at the same time allowing them to take
advantage of growth areas and businesses that are not overlapping, such as in
packaging and label products."
A
merged business would control around 40% of European paper capacity, said
Handelsbanken. Any deal would be subject to approval by the European
competition authorities.
A
paper industry expert told PrintWeek: "I think it would make complete
sense culturally. If UPM is going to take over anyone then Stora Enso is the
most compatible. And Stora Enso have made it clear they don’t want to remain in
paper making."
UPM
and Stora Enso declined to comment on market rumours.
