Competition authorities hit EQT with EUR20.6m fine

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EQT has been forced to pay EUR20.6m in fines for its portfolio company Munksjo Paper GmbH by German competition authority, Bundeskartellamt. The authority held that Munksjo, together with Felix Schoeller Holding GmbH & Co. KG and Arjo Wiggins Deutschland, worked as a cartel by fixing prices and limiting production capacity from August 2005 to November 2007.

The president of Munksjo, Gunnar Palme, resigned on 27 November 2007 as a result of the accusations.

The board of directors have accepted the fine, but EQT has to pick up the bill.

According to the Swedish press, Munksjo is turning out to be a poor deal for the GP, since EQT III acquired the business for an undisclosed value in 2005 (January 2005, page 13). The company is not delivering according to expectations with large losses in recent years.

Munksjo is a manufacturer of specialty paper products. The company is organised around three divisions: decor paper (60% of sales), specialty paper (20%) and pulp (20%).

Munksjo's main product, decor paper, is used in laminates for furniture, flooring, kitchen worktops and other applications where the end product has the appearance of wood or other materials.