EU Commission approves merger of Kymmene and Repola

The Commission of the European Union has approved the merger of Kymmene Corporation and Repola Corporation.
In reaching its decision, the Commission stated that the new UPM-Kymmene Corporation's shares of the European newsprint and magazine papers markets will not exceed approximately 20 per cent, while several competitors have strong positions for these products in the European market.
At present, Repola´s subsidiary United Paper Mills markets its products through Finnpap Marketing Association, while Kymmene has its own marketing organization. The two merging companies have committed to terminate existing marketing arrangements with Finnpap during 1996 and to market their paper through their own organization.
Repola and Kymmene have dominated the Finnish market for paper sacks for some years. The Commission feels that the merger would give UPM-Kymmene a dominant position in the Finnish paper sacks market. Kymmene and Repola have therefore given the Commission their commitment that they will divest some of their paper sack capacity in Finland.
"As expected, the decision came without suspension within one month. The requirements relating to Finnpap and the paper sacks business came as no surprise either, and these requirements will naturally be met in due course. The shareholders' approval later this week will remove all obstacles to the active operation of UPM-Kymmene, although the new corporate entity will not officially be formed until 1 May 1996", said Juha Niemelä, President and CEO of UPM-Kymmene Corporation.