More than a year after blocking the takeover of blow molding machinery supplier Groupe Sidel by Tetra Laval International SA, the European Commission has given the $1.6 billion deal the green light.
However, the commission made its ruling conditional on packaging and machinery giant Tetra Laval's agreement to license Tetra Fast, a new stretch blow molding technology, to third parties.
The commission was forced to review its Oct. 20, 2001, decision to block the merger after Europe's second-highest court, the Court of First Instance in Luxembourg, upheld Tetra Laval's appeal in October 2002.
``We are very pleased that the commission has accepted our arguments in this case. Although it has been a lengthy and at times difficult process, we have remained confident that a positive outcome could be achieved,'' said Larry Pillard, Tetra Laval chairman.
Now the company in Pully, Switzerland - which already holds more than 95 percent of Le Havre, France-based Sidel - plans to acquire the remaining stake, said Jorgen Haglind, Tetra Laval communications vice president.
Before unveiling its plans to integrate Sidel, his group will examine its acquisition thoroughly from the inside, something it was unable to do until the deal was approved formally Jan. 13. The process should take until May or June, Haglind said.
The Tetra Fast stretch blow molding technology uses an explosive chemical reaction of hydrogen and oxygen, instead of compressed air, to form PET bottles. Tetra Fast still is being tested internally and has not been used commercially by any customer, he said, adding that the technology could help blow molders achieve substantial cost savings.
In its revised ruling, the commission took note of Tetra's earlier voluntary agreement not to re-enter the PET preform market for five years. Tetra last year sold its preform injection molding plants in Spain, Italy and Belgium to Alpla Werke of Hard, Austria.
Sidel, which experienced a serious crisis in 2001 when its sales plummeted and it reported an annual loss of 47.5 million euros ($47.5 million), admitted relief at the success of Tetra's friendly takeover.
``The company now has reliable backing of an industrial group that is recognized as an expert in the packaging world,'' Sidel said. ``With the support of its shareholder, Sidel now intends to pursue its recovery and development efforts.''