The European Commission has opened an in-depth investigation into the proposed combination of Ahlstrom's Label and Processing business and Munksjö AB.
A preliminary investigation indicated potential competition concerns in the markets of pre-impregnated paper (PRIP) and abrasive paper backings, where the merged firm would have high market shares in the European Economic Area (EEA) and worldwide.
The Commission has 90 working days, until 29 April 2013, to take a final decision on whether the combination would significantly impede effective competition in the EEA or any substantial part of it.
Ahlstrom and Munksjö AB said they will continue to work closely with the commission in order to allow completion of the review as quickly as possible but conceded the completion of the first part of the deal in Q1 2013 would possibly have to be pushed back to Q2.
Joaquín Almunia, commission vice president in charge of competition policy, said: “This proposed merger in the paper industry would remove a competitor from some markets which are already highly concentrated.
“The commission needs to make sure that effective competition is preserved and prevent harm to customers, particularly when the only few available sources of supply are at stake."