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Economic downturn leads to business opportunities in the packaging sector

By Pooja Kondhia , 05-Oct-2011
Last updated on 05-Oct-2011 at 17:56 GMT

The beauty packaging industry has witnessed a series mergers and acquisitions, consolidations as well as expansions in recent months, as continued economic uncertainty unleashes business opportunities.

New Jersey-based packaging manufacturer Topline expanded into the European market with the acquisition of Cosworld-Primapack, based in France.

Negotiations for the acquisition began in June and were finalised at the end of September, which will see Cosworld-Primapack consolidated completely in to Topline’s French operations.

The acquisition creates a platform enabling Topline to offer an extended range of packaging options throughout Europe, such as filling, assembly and turnkey solutions, according to the supplier.

Expansion galore in Europe

Similarly, US-based labelling company Multi-Color expanded its operations in Europe by investing in Consumer Products and Spirit Label Company, based in Poland, for a total of $9.3m (PLN26m).

The deal is expected to be completed in the course of the year, which will see the company name changed to Multi-Color WDH Poland, to reflect the merger with the US label provider.

Multi-Color had a similar business model and client base to the Polish company. Multi-Color says the deal should prove to be a good opportunity for expansion into new markets using an already established base.

Further expansion

The US label provider Multi-Color also expanded its business in labelling in the US with the acquisition of Nebraska-based York Label Group at the end of summer this year.

Multi-Color has agreed to pay $356m in a combination of shares stock and cash, completing the acquisition on October 3rd 2011.

York Label has manufacturing bases in both North America and Chile, mainly concentrated on pressure sensitive labels for the personal care market, an area with much potential for growth.

Bidding for Graham Packaging

Likewise, global packaging company Graham Packaging was bought by New Zealand-based Reynolds Group’s with a price tage of US$1.68bn after it successfully outbidding Silgan Holdings.

The deal, which according to Graham Packaging was too good to turn down, was concluded in early September 2011.

Graham Packaging also confirmed it would pay Silgan US$39.5m as a termination fee under the terms of the acquisition agreement it had entered into with the company earlier in the year.

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