Brussels, 24/07/2001 (Agence Europe) - The European Commission opened on Monday an in-depth investigation concerning the planned acquisition of Haindl'sche Papierfabriken KGaA (Haindl). The acquisition must be carried out in two simultaneous operations. The first consists of the acquisition by the Finnish company UPM-Kymmene of all the capital in Haindl. In the framework of the second, UPM-Kymmene to resell to the Norwegian paper producer Norske Skog two of the six Haindl factories. The initial investigation undertaken by the Commission revealed that the project raised problems in the market for newspaper and magazine paper. A final decision is planned for the end of November 2001.
UPM-Kymmene is the holding company for a group of companies mainly operating in the forestry products industry. It is also the largest producer of magazine paper in the world. Haindl also operated in the paper industry and is among the five largest suppliers of newspaper paper and magazine paper in Europe. As for Norske Skog, this is a company active in the forestry products industry, whose main work is the production and sale of printing paper containing wood (newspaper and magazine paper). Norske Skog is the second largest producer of printing paper in the world.
Last 28 May, UPM-Kymmene and Haindl concluded a sales and share buying agreement, which will make Haindl a 100% subsidiary of UPM-Kymmene, the next day, UPM-Kymmene and Norske Skog concluded an agreement to buy assets and shares, according to which UPM-Kymmene would sell the Parenco factory (Netherlands) and that in Walsum (Germany) to Norske Skog. The two agreements have been notified to the Commission on 20 June for regulatory authorisation.
During the preliminary investigation, the Commission felt that the two transactions raise serious competition problems on the market for newspaper and magazine paper in the European Economic Area, where they will translate into a very high level of concentration. This is why it decided to open an in-depth investigation.