UK regulator scrutinizes Sonoco’s US$3.9B Eviosys acquisition

UK – The UK’s Competition and Markets Authority (CMA) has initiated a regulatory review of Sonoco’s planned acquisition of Eviosys, valued at approximately US$3.9 billion.

Sonoco announced the agreement to acquire Eviosys, a European food can manufacturer owned by KPS Capital Partners, in June 2024.

The CMA’s inquiry will assess whether the merger could significantly reduce competition in the UK market under the guidelines of the Enterprise Act 2002.

Interested parties may submit comments on the acquisition from 24 October to 7 November 2024 to support the CMA’s assessment, with a preliminary decision expected by 19 December.

Eviosys specializes in metal packaging, producing items such as food cans, aerosol cans, metal closures, and promotional packaging, and operates 44 facilities across 17 countries with a workforce of around 6,300.

Sonoco anticipates Eviosys will generate approximately US$2.5 billion in revenue by the end of 2024, with over US$100 million in synergy benefits projected from the transaction.

Sonoco’s President and CEO, Howard Coker, highlighted the acquisition’s strategic value, noting that Eviosys’s international presence and diverse customer base would enhance Sonoco’s metal packaging portfolio.

“Together with the talented team at Eviosys, we are focused on unlocking new opportunities in attractive end markets, providing our customers with a stronger value proposition and generating strong returns for our shareholders,” Coker said.

Sonoco, which operates over 300 facilities worldwide with 22,000 employees, reported net sales of approximately US$6.8 billion in 2023.

Stora Enso retains Beihai Packaging site amid strategic shift

In a separate development, Stora Enso has opted to retain its Beihai packaging board production site and forestry operations in China, ending a divestment plan announced in December 2022.

The decision reflects the company’s focus on fiber-based packaging and belief that maintaining the Beihai operations offers greater strategic value than selling.

Stora Enso intends to enhance the Beihai facility by prioritizing operational efficiency, cost reductions, and product innovation.

Planned updates include an expanded product range, with a focus on high-value liquid packaging boards to reinforce Stora Enso’s market presence without requiring major capital investments.

Hans Sohlström, Stora Enso’s President and CEO, noted that rising global wood and logistics costs have improved Beihai’s relative competitiveness.

“Following a thorough review and negotiations with potential buyers, we have decided to terminate the divestment process and focus on the ongoing business. We are confident that Stora Enso is best positioned to continue operating this site,” Sohlström commented.

Stora Enso, which holds an 80% stake in Beihai, operates other liquid packaging board facilities in Finland and Sweden, serving a mix of global and local customers with premium-quality packaging products.

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