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UPM-Kymmene Wins EU Approval to Buy Myllykoski, Rhein Papier

UPM-Kymmene Oyj (UPM1V), Europe’s second- biggest papermaker, won European Union approval to buy Myllykoski Oyj and Rhein Papier GmbH, regulators said.

The European Commission said an in-depth probe showed that customers would continue to have sufficient suppliers for magazine paper and other products, it said in an e-mailed statement today.

“I’m satisfied that there will remain sufficient competition after the acquisition,” said EU Competition Commissioner Joaquin Almunia.

Helsinki-based UPM is aiming to expand as a “cost- competitive pulp producer,” it said last month. Papermakers are under pressure to combine as costs rise for pulp, wood and recycled paper and demand for paper slows with more consumers turning to digital versions of books, magazines and newspapers.

The Finnish papermaker said it expects its purchase of Finland’s Myllykoski and Germany’s Rhein Papier to generate annual cost savings of more than 100 million euros ($141 million) from 2012. Myllykoski and Rhein, controlled by the same shareholders, have seven publication-paper mills in Germany, Finland and the U.S.

UPM rose 4.5 percent to 12.25 euros at 12:56 p.m. in Helsinki.

UPM declined to immediately comment as the company hadn’t yet been informed by the European Commission of the merger approval.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.

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