Finnish forest industry group UPM and South African paper producer Sappi have signed a definitive agreement to combine their European graphic paper operations into a new joint venture valued at approximately €1.42 billion. The transaction, announced in a stock exchange release by UPM, marks one of the most significant consolidation moves in Europe’s graphic paper sector in recent years. The new company will combine UPM Communication Papers with Sappi’s European graphic paper business. The partners will each hold a 50% stake and operate the venture as an independent company under an agreed shareholder framework. The deal comes as the graphic paper industry continues to struggle with long-term structural decline. Digitalisation, falling newspaper circulation and reduced demand for printed publications have forced producers across Europe to close mills, reduce capacity and pursue efficiency improvements. The companies estimate annual synergies of around €100 million through the combination.