Upon formally accepting the undertakings with Liqui-Box, the UK CMA concluded its investigation into the Liqui-Box’s acquisition of DS Smith’s plastic packaging division
Image: Liqui-Box will acquire DS Smith’s plastic division. Photo: courtesy of Liqui-Box.
Liqui-Box, a supplier of bag-in-box packaging, has agreed to sell its bag-in-box business to Peak Packaging.
The deal complies with the requirements of the UK’s Competition and Market Authority (CMA) over the proposed acquisition of DS Smith’s flexible and rigid plastic packaging division by Liqui-Box for $585m.
The deal complies with UK’s CMA requirements over Liqui-Box’s proposed acquisition
The CMA raised two key concerns following the first phase of its investigation into the deal, which was signed by the two parties in March 2019.
It said Liqui-Box and DS Smith are two of the four main companies in UK that offer a specialist type of packaging called bag-in-box – a plastic bag that is inserted into cardboard boxes for transporting food and drink.
In a statement, the CMA said: “If the deal is allowed to go ahead as planned, the CMA is concerned it could create insufficient competition in the supply of these products, leading to their customers potentially having less choice and paying higher prices, especially as there are very few large suppliers in the UK.
“The CMA is also concerned that the reduction in competition could lead to lower quality products and/or a poorer service.”
As a result, Liqui-Box has signed an agreement to divest its bag-in-box business with customers based in the UK from its Wythenshawe plant in the UK. Financial terms of the deal were undisclosed.
Following signing of the agreement, the UK CMA had accepted the undertakings with Liqui-Box and had concluded its investigation into the Liqui-Box’s acquisition of DS Smith’s packaging business.
Liqui-Box CEO Ken Swanson said: “We’re happy to have clearance now in the U.K. and move one step closer to completing the acquisition of the DS Smith Plastics Division.
“Our team is prepared for a seamless handoff to Peak Packaging for customers in the U.K. and anticipate no service disruption for those outside of the U.K.”
Liqui-Box, a portfolio company of Olympus Partners, manufactures Bag-in-Box flexible packaging, fitments and pouches to serve various global industries, including dairy, beverage, food and non-food customers.