Glatfelter

(GLT) - Get Report

said Wednesday that the European Commission has decided to enter into a Phase II investigation related to its acquisition of

J R Crompton's

U.K.-based Lydney mill.

The Phase II investigation is expected to be completed during the first quarter of 2007 and till then the company plans to continue to operate Lydney as a stand-alone business.

The York, Pa.-based company said that the Phase II investigation will not change its view on the transaction and it continues to believe that the Lydney mill acquisition does not create a significant impediment to effective competition.

Glatfelter said that it remains committed to delivering the high quality of products and services expected by customers served by the Lydney mill.

The commencement of a Phase II investigation does not prejudice the final outcome of the review and, in particular, does not imply that a transaction is more likely to be prohibited than cleared.

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