Arjowiggins will learn early next month whether it is permitted to buy M-real's Zanders Reflex mill in Germany.
The European Commission is due to decide by 7 December whether to allow the merger after considering the likely effect on the carbonless paper market, which is in decline and beset by structural overcapacities.
The submission from Arjowiggins and M-real argues that the effect on the market will be limited and that the merged entity will face strong competition from three large players, Koehler, Mitsubishi and Torraspapel, as well as a number of local players.
The parties pointed out that prices will be constrained by the overcapacities in the market and the potential competition from thermal paper producers and neighbouring markets, such as uncoated wood-free paper.
The mill, in Düren, has been operating since 1857 and has four paper machines, with a joint annual capacity of 100,000 tonnes of speciality paper. It is dedicated to the production of carbonless and creative papers, such as letterhead, employs 470 people and has annual sales of £104m (€150m).
The financial value of the deal was not disclosed, but M-real, a subsidiary of Metsäliitto Group, will book a £14m loss from the transaction.
As a result of the sale, Arjowiggins, a subsidiary of Sequana Capital, will own all the assets and inventories of Zanders Reflex mill and the associated trademarks.
Source: printweek
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