Paper Giants to Fold Business Together to Counter Falling Demand

UPM-Kymmene and Stora Enso are being driven towards a merger of their European units by a relentless fall in demand and prices in the digital era. Now after years of speculation about a possible tie-up, investors have in recent weeks raised bets UPM and Stora will fold most of their paper businesses into a joint venture over the next year.

Such a move, followed by more mill closures, would help trim output and costs and allow the owners to focus more on their growth areas such as pulp and packaging board. The cuts could also help stabilize market prices and make