Liqui-Box Inc. has divested several product lines in order to proceed with its acquisition of DS Smith plc's plastics packaging division.
The U.S. Department of Justice's Antitrust Division filed a civil lawsuit Feb. 19 to block the merger without the sales, according to a news release.
Owned by Olympus Partners, the flexible liquid packaging specialist agreed to divest all of DS Smith's dairy, post-mix, smoothie and wine bag-in-box products, a settlement proposition the DOJ also issued at the same time as the filing, the release states.
Liqui-Box has already sold its Rapak brand, which has two manufacturing facilities — located in Indianapolis and Union City, Calif. — and a new facility in the Chicago area.
"I am pleased that we were able to find a solution that works for all parties and can now move forward with closing the acquisition," Ken Swanson, Liqui-Box president and CEO, said in a release. "As we work to integrate Liqui-Box and DS Smith Plastics, we will align product families, improve distribution networks and leverage the strengths of each business to deliver an enhanced value proposition."
TriMas Corp. of Bloomfield Hills, Mich., said it will acquire the Rapak brand on Feb. 19. The sale will be official at the completion of Liqui-Box acquisition of DS Smith. TriMas will use the brand name globally and in product lines.
"We are pleased to be adding the Rapak brand name and bag-in-box applications and products to TriMas' packaging portfolio," said Thomas Amato, president and CEO of TriMas. "This product adjacency allows TriMas to participate in this socially responsible trend of liquid packaging solutions, while also leveraging our strength in advanced closure and dispensing technology."
The merger, as originally structured, would have eliminated competition for packaging products that dairies, soft drink makers and other food producers rely on to preserve and safely transport liquids to stores, restaurants and other food processors, according to the release.
"[The] settlement will ensure that purchasers of [bag-in-box] continue to benefit from vigorous competition in the development, manufacture and sale of these products," Makan Delrahim, assistant attorney general of the DOJ's Antitrust Division, said.
Richmond, Va.-based Liqui-Box ran into similar issues pursuing DS Smith in Europe in 2019 when the United Kingdom's Competition and Markets Authority required the company sell its bag-in-box business with U.K. customers. On Oct. 7, the company sold its bag-in-box production equipment in Wythenshawe, England, to Peak Packaging.
The transaction is expected to close by the end of the first quarter of 2020.