EU scrutinizing Tetra-Sidel merger
LAVAL, SWITZERLAND - European Union regulators announced July 6 they will take a closer look at Tetra Laval SA's proposed acquisition of Groupe Sidel.
The inquiry seeks to determine whether the merger will ``lead to the creation or strengthening of a dominant position in the market for liquid-food packaging equipment,'' according to a statement issued by the EU's executive office.
Laval-based Tetra Laval in April announced the deal to buy Sidel for 1.7 billion euros ($1.61 billion).
Tetra Laval is a leading producer of drink boxes, and makes some PET preforms, bottles and plastic closures. Plastics, however, have not been a major part of the company's operations.
The acquisition of Sidel - a major manufacturer of PET blow molding machines and pioneer of the Actis bottle-coating system - would increase Tetra's plastics presence significantly.
Jorgen Haglind, Tetra vice president of communications, said he is not too worried about the inquiry, which he characterizes as routine.
``Although we had hoped for a clearance in Phase I, this is part of the regulation. You always have to count on Phase II,'' Haglind said in a telephone interview from Lund, Switzerland. ``We are confident we will get approval, which is the case for the majority of cases going into Phase II.
``It means a delay, which is unfortunate, but apart from that doesn't mean anything.''
Meanwhile, Haglind denied speculation that Tetra plans to shelve the Actis process once the acquisition is complete.
Schmalbach, Silgan form cap venture
DOWNERS GROVE, ILL. - Schmalbach-Lubeca AG and Silgan Holdings Inc. have combined their plastic and metal closure operations into a new joint venture.
White Cap LLC will be headquartered in Downers Grove. The firm will employ 1,500 at seven plants and will generate annual sales of about $270 million.
About 20 percent of its sales will be generated by plastic closures, according to Walter Hannan, White Cap LLC's vice president of human resources. He said future growth will be driven by plastic and composite products.
The companies announced the deal June 29. In a July 6 telephone interview, Hannan said the merger is the perfect solution to what could have been an adversarial relationship between the two packaging leaders.
``We had been having some discussions with Silgan going back a year or so ... related to the fact that there was a particular closure design we felt potentially might be an infringement on a patent,'' said Hannan, who came from Schmalbach. ``That led to a discussion if either of us were interested in selling our business or doing something together.
``The marriage seemed to be of real interest to both parties. We felt it would create the premier supplier in terms of closure solutions for the food and beverage industry.''
Schmalbach-Lubeca of Ratingen, Germany, will own 65 percent of the venture. It is contributing plants from its White Cap Inc. subsidiary in Chicago and Champaign, Ill.; Hazleton, Pa.; Athens, Ga.; and Mexico City. The Champaign and Athens plants are dedicated to plastic closures, Hannan said.
Silgan of Stamford, Conn., owns 35 percent of the venture and contributed plants in Evansville and Richmond, Ind. Ray Torres was named president and chief executive officer.
Bemis buys packaging firm Duralam
MINNEAPOLIS - Bemis Co. Inc. on July 6 announced plans to buy Duralam Inc. of Appleton, Wis.
Terms were not disclosed.
The deal includes Duralam's film-making plants in Appleton and nearby Neenah, Wis., said Melanie E.R. Miller, director of investor relations at Minneapolis-based Bemis. The plants employ 195.
In a July 6 telephone interview, Miller said Duralam's operations complement Bemis' leading position as a producer of packaging films for meat, cheese and other high-barrier applications.
``Duralam is a packaging company that operates very near our premier packaging company in Oshkosh [Wis.], where we also make packaging for meat, cheese, candy and other things,'' Miller said. ``It makes a lot of sense for us as we look toward making capital expenditures in that area.''
What makes this move different from Bemis' purchase of Viskase Cos. Inc.'s film business a year ago is that in the earlier deal Bemis acquired technology that it previously did not have access to, Miller said.
``In the Viskase acquisition, we were acquiring a new patented shrink technology, whereas with Duralam we're really extending our plant capabilities and adding capacity for meat and cheese packaging products,'' she said.
Duralam reported annual sales of $55 million. Miller said Bemis believes Duralam has the capacity to reach $80 million in sales.
Bemis, which is publicly held, reported 2000 sales of $2.16 billion, including film sales of $1.6 billion, Miller said.