A major new flexible packaging leader in Europe is set to emerge as a result of an April 6 deal including Amcor Ltd., Danisco A/S and Ahlstrom Corp., the parent of Sweden's AB Akerlund & Rausing.
The three companies will merge their European flexible plastic and paper operations under the Amcor Flexibles Europe umbrella. The operation will have annual sales of 1 billion euros ($900 million) and 40 plants in 14 countries.
The joint venture will be based in Copenhagen, Denmark. It will concentrate on the higher technology end of the flexibles market for products such as coffee, confectionery and fresh foods, according to Amcor Ltd. of Melbourne, Australia.
The deal is scheduled to close by June.
Amcor will own 67 percent of the venture, while Copenhagen-based Danisco will hold a 25 percent share and Ahlstrom of Helsinki, Finland, will own the rest.
Amcor, whose European operations currently have annual sales of A$550 million (US$270 million), will contribute A$712 million (US$349 million) for its holding in the venture. The present head of Amcor Europe, Graham James, will be managing director of the venture.
Danisco has film extrusion and converting plants in Denmark, Britain, France, Spain, Portugal and Switzerland. The company wants to concentrate on its core food ingredients business. Danisco will be paid 242 million euros ($218 million), plus up to 100 million euros ($90 million) based on the profitability of the merged group.
Last year Danisco Flexible reported profit of 8 million euros ($7.2 million) on sales of 595 million euros ($535 million).
"By retaining ownership in this new market leader, we get the opportunity to capitalize on the consolidation of the European market for flexible packaging," Danisco Chief Executive Officer Alf Duch-Pedersen said in a news release.
Amcor Managing Director Russell Jones added: "It establishes Amcor as the leading flexible packaging company in Europe and is an important step forward in our vision of being a leading global packaging company."
Amcor has been aggressive in adding to its packaging empire recently, including its February acquisition of PET blow molder CNC Containers Corp. of Tumwater, Wash. That deal was spearheaded by Amcor Twinpak-North America Inc., based in Montreal.
The three-way merger requires approval from the European Union.