By Aoife White and Jeremy Hodges for Bloomberg
European Union officials raided several wood pulp producers over concerns they formed a cartel, sending stocks tumbling.
Stora Enso Oyj fell the most since January in the wake of the announcement on Tuesday. The company confirmed that officials had visited its Helsinki office. UPM-Kymmene Oyj dropped as much as 5.1% in Helsinki trading as it said that antitrust authorities had “started an unannounced inspection” at its premises.
Surprise raids are usually the first big step in a cartel investigation where officials sweep up documents that might show companies have been working with rivals to fix prices or allocate sales. The EU’s fines are among the world’s highest with companies paying up to 10% of yearly revenue if they are found guilty of breaching antitrust rules.
Metsa Fiber, a unit of the cooperative Metsa Group, is being inspected, while the group’s listed board maker Metsa Board Oyj is not.
“Pulp is a global commodity, so proving antitrust issues will be challenging,” Cole Hathorn, an analyst at Jefferies International Ltd., said in a note to clients. “But, it is clearly negative for pulp sector sentiment.”
A spokesperson for Svenska Cellulosa AB said in an email that they had not been raided by officials, as did Holmen AB and Ahlstrom-Munksjo Oyj. Norske Skog ASA also said it was not affected.
“Unannounced inspections are a preliminary step in an investigation into suspected anticompetitive practices,” the European Commission said Tuesday. The inspections do not imply that the companies are guilty of anti-competitive behavior,it said.