BRUSSELS Dec 7 EU antitrust regulators opened
an investigation on Friday into the proposed merger of Finnish
paper producer Ahlstrom and a unit of Swedish company
Munksjo, worried that the new entity would have too much market
Ahlstrom said in April it would spin off its label and
processing business unit which would then combine with
privately-held Munksjo. Private equity firm EQT is the biggest
owner of Sweden's Munksjo.
The European Commission said a preliminary investigation
indicated potential competition concerns in the markets of
pre-impregnated paper and abrasive paper backings as the merged
company would dominate both European and global markets.
"This proposed merger in the paper industry would remove a
competitor from some markets which are already highly
concentrated," EU Competition Commissioner Joaquin Almunia said
in a statement.
The EU competition authority will decide by April 29 whether
to approve the deal.
(Reporting by Foo Yun Chee; Editing by John O'Donnell)