The European Commission will today complete its review of Jefferson Smurfit Group's €4.5 billion purchase of Dutch rival Kappa Packaging.

The companies are hoping to conclude the deal by the end of this year or early next year.

The Irish group yesterday reported a €7.8 million pretax loss in the three months to the end of September an increase on the €2 million loss in the same period last year.

In the nine months to the end of September 2005 the group's losses amounted to €61.6 million, compared to €14.9 million in the previous year.

Jefferson Smurfit said its third quarter performance reflects the ongoing difficult product market conditions in Europe that have continued through the year.

"Within the quarter, product pricing declined as a consequence of the combined impact of general economic weakness and the relative strength of the euro," it said.

Looking ahead, the company said that product price increases for both the kraftliner and recycled containerboard grades have been announced for the fourth quarter.

These increases reflect, in part, rising input costs and modestly improving market conditions in some European product markets.

It said it continued to benefit from its balanced geographic exposure, with Latin America reporting another solid financial performance in the third quarter.

In Mexico the company reported reduced growth and is being negatively affected by rising input costs.

The group remains focused on cash flow generation and reduced its debt by €59 million during the past three months.

Net sales for the group declined by 12 per cent to just over €1 billion while free cash flow for the period was €55 million compared to €82 million in the same period last year.

At the end of September the group's net borrowing was €2.4 billion, down €58 million.

In Europe, its said the market for its products was difficult with new recycled containerboard capacity introduced this year, continuing to add pressure to an already weak operating environment, it said.