The merger of three aluminum and packaging giants could be a two-step process. Alcan Aluminium Ltd. said it and its proposed partners will proceed with the merger of Alcan and Alusuisse Lonza Group Ltd., but they will file a separate merger application for Pechiney.
The European Commission has expressed concerns about the Pechiney part of the merger and the partners want time to review those concerns and submit a new application, Alcan noted in a March 14 news release.
Alcan spokesman Marc Osborne said the EC's concerns relate to flat-rolled aluminum products, but he refused to provide more detail. The Financial Post of Toronto reported the EC is concerned that the three-way merger would create a dominant position in sheet aluminum used to make cans, car parts and packaging. Osborne would not confirm the report.
Alcan and Alusuisse are proceeding with their merger application and expect the EC to rule on it soon. Osborne said there is no deadline to submit a revised merger application involving Pechiney.
The three firms announced the merger plan last summer. Although their main goal is to pool the aluminum resources, the three-way merger also would create a packaging giant with sales of about $4.2 billion a year.
Alusuisse has annual packaging sales of about $2.3 billion, while Pechiney would contribute $1.9 billion in packaging sales. Plastics would account for more than half of the new firm's packaging sales. Alcan doesn't produce plastic packaging but is involved in plastics as a supplier of alumina trihydrate flame retardant.
The partners plan to base the new company in Montreal, where Alcan has its headquarters.
Pechiney is based in Paris, and Alusuisse is in Zurich, Switzerland. The combined firms' sales in 1998 would have been $21.6 billion.