30th Sep 2019 09:22
(Alliance News) - The Competition & Markets Authority said Monday it will not refer the acquisition of DS Smith PLC's flexible plastic packaging division by Liqui-Box Inc to a Phase Two investigation, accepting the undertakings offered by Liqui-Box.
Shares in DS Smith, a FTSE 100-listed packaging firm, were up 1.3% at 358.75 pence on Monday morning.
The GBP450 million takeover deal was first announced in March, and in May the UK monopoly regulator said it would probe the proposed acquisition.
In mid-July, the regulator had said the initial phase of its investigation found that the acquisition would create "insufficient competition", given that Liqui-Box and DS Smith are two of only four companies offering specialist Bag-in-Box packaging to food and drink suppliers in the UK.
Aside from the potentially higher prices due to fewer packaging choices in the market, the CMA also was concerned the takeover could lead to lower-quality products.
In late July, Liqui-Box offered undertakings to the CMA, following which the regulator said there were "reasonable grounds" for the undertakings to remedy the lessening of competition to be accepted.
The undertakings proposed by Liqui-Box comprised the divestment of its Bag-in-Box business, which includes manufacturing and assembly equipment at its Wythenshawe facility in Manchester, UK, and a list of Liqui-box's UK BiB customers to be transferred to the buyer.
Liqui-Box in mid-September proposed bulk liquid packaging manufacturer Peak Packaging Ltd as the upfront buyer for its BiB business.
By Dayo Laniyan; [email protected]
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