{"id":861781,"date":"2026-05-28T12:30:00","date_gmt":"2026-05-28T10:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=861781"},"modified":"2026-05-28T14:40:06","modified_gmt":"2026-05-28T12:40:06","slug":"south-african-company-worth-r8-billion-teaming-up-with-european-giant","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/861781\/south-african-company-worth-r8-billion-teaming-up-with-european-giant\/","title":{"rendered":"South African company worth R8 billion teaming up with European giant"},"content":{"rendered":"\n

South Africa’s Sappi Limited and Finland’s UPM-Kymmene Corporation have signed an agreement to form an independent 50\/50 Joint Venture for graphic paper in Europe and the US. <\/p>\n\n\n\n

Sappi has agreed to bring its European Graphic Paper business together with UPM’s Communication Papers business in Europe, the UK and the US.<\/p>\n\n\n\n

Sappi, which has a market cap of R8 billion, will contribute the following assets: Gratkorn Mill, Austria; Ehingen Mill, Germany; Maastricht Mill, the Netherlands; and Kirkniemi Mill, Finland.<\/p>\n\n\n\n

UPM, which has a market cap of \u20ac13 billion, will add its Communication Papers business assets, including the Augsburg, Schongau, and Nordland mills in Germany. <\/p>\n\n\n\n

It will also include locations in Rauma, Kymi, and J\u00e4ms\u00e4nkoski, Finland; Caledonian, United Kingdom; and Blandin, United States. <\/p>\n\n\n\n

The transaction remains subject to several regulatory and other conditions, but the parties expect final resolutions by the end of 2026. The Joint Venture would become operational upon closing. <\/p>\n\n\n\n

\u201cWe have been searching for a solution to secure a long-term profitable future for our European business,” said Sappi CEO Steve Binnie. <\/p>\n\n\n\n

“This innovative partnership with UPM will deliver a focused business bringing the best assets and people together to create a strong future, which can ensure sustained support for our customers.” <\/p>\n\n\n\n

The joint venture’s formation comes amid a challenging environment for the graphic paper industry, which is facing pressure from falling demand, high energy costs, and excess production capacity. <\/p>\n\n\n\n

Sappi’s big plans<\/h2>\n\n\n
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Sappi Limited CEO Steve Binnie and UPM President and CEO Massimo Reynaudo
(Headline Image Source: ABB)<\/figcaption><\/figure><\/div>\n\n\n

To remain competitive and sustainable, Sappi said consolidation is needed and will contribute to a more robust, resilient European graphic paper industry. <\/p>\n\n\n\n

Sappi said that the consolidation of its and UPM’s graphic paper assets should enhance operational performance and support more sustainable capacity utilisation on the most efficient paper machines. <\/p>\n\n\n\n

It added that the joint venture may be able to reduce overall climate impact in alignment with the EU\u2019s Clean Industrial Deal via improved operational efficiencies and investment in decarbonisation.<\/p>\n\n\n\n

Sappi added that the transaction presents the best strategic option to maximise value for Sappi shareholders. <\/p>\n\n\n\n

This will be done by combining the parties’ businesses within an integrated platform, which can improve adaptability and secure a structurally competitive cost base.<\/p>\n\n\n\n

The potential operational synergies are anticipated to be at least \u20ac100 million per annum for the Joint Venture, Sappi said, <\/p>\n\n\n\n

It said that the parties will benefit from greater value from the combined asset base than either party could achieve on a standalone basis.<\/p>\n\n\n\n

It also addresses Sappi\u2019s key strategic priorities of shifting its mix towards higher-growth, higher-margin segments by reducing its direct graphic paper exposure, reducing debt, and improving its balance sheet. <\/p>\n\n\n\n

Sappi’s share of equity-announced income from the Joint Venture is also expected to improve its consolidated EBITDA relative to the standalone EBITDA of the Sappi Contributed Business over time.<\/p>\n\n\n\n

The group will also receive a cash consideration as per the deal, which will enable it to reduce offshore debt. Cash dividends from the Joint Venture will help reduce debt in the long run. <\/p>\n\n\n\n

“The establishment of the Joint Venture creates a sustainable standalone business that ultimately preserves strategic optionality for Sappi by providing divestment flexibility in the future,” it added. <\/p>\n","protected":false},"excerpt":{"rendered":"

Sappi is teaming up with Finland’s UPM-Kymmene Corporation to create a new Joint Venture focused on graphic paper. <\/p>\n","protected":false},"author":95,"featured_media":861784,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[9872],"tags":[13634,24324],"class_list":["post-861781","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-sappi","tag-upm-kymmene-corporation"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/861781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=861781"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/861781\/revisions"}],"predecessor-version":[{"id":861836,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/861781\/revisions\/861836"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/861784"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=861781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=861781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=861781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}