Pechiney International SA will boost its European flexible packaging capacity with the purchase of film and bag producer Soplaril SA from oil and chemicals giant TotalElfFina SA.
Pechiney and TotalElfFina, both based in Paris, have signed a preliminary sale agreement, although completion of the deal still is subject to approval from unions and regulators.
Soplaril, part of TotalElfFina's Atofina chemicals division, has annual sales of about 200 million euros (US$170 million).
Suresnes, France-based Soplaril operates seven plants in France, Italy, Spain and Portugal, specializing in multilayer packaging film, mainly for food, and converted plastic bags. Soplaril is a leader in Europe in the manufacture of flexible plastic bags used for detergent refills.
The acquisition, for an undisclosed sum, will contribute to a general consolidation of the region's flexible packaging sector. It will put Pechiney, already a leading flexible packaging player in the United States through its American National Can operations, among the top five producers in Europe, according to Christel Bories, senior executive vice president of the Pechiney Packaging Division.
She called the deal the ``perfect example'' of an acquisition for Pechiney's packaging operations.
``We will have greater presence in southern Europe, in areas with favorable cost bases and in high-growth markets,'' she said.
Pechiney's packaging business reported 2000 sales of 2.1 billion euros ($1.78 billion). It includes the food packaging divisions of Pechiney Plastic Packaging and Pechiney Emballage Alimentaire SA, and the health and cosmetics packaging businesses of Techpack SA and Cebal SA.
Pechiney currently operates 15 flexible packaging plants in the United States and six in Europe.
The Soplaril addition will double Pechiney's European flexible sales to about 400 million euros ($340 million), Bories said.
Pechiney specializes in the aluminum and packaging sectors, including PET bottle production.
The company reported total 2000 sales of 10.7 billion euros (US$9.1 billion).