POST Online Media Lite Edition



 

Amcor to sell medical flexible packaging assets to proceed with Bemis acquisition

Christian Fernsby |
The Department of Justice announced that Amcor will be required to divest three manufacturing facilities and other assets in order to proceed with its $6.8 billion acquisition of Bemis Company Inc.


The Department said that, without the divestiture, the proposed acquisition would eliminate competition between two of only three significant suppliers of three medical packaging products that are critical to the safe transportation and use of medical devices.

The Department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed transaction.

At the same time, the Department filed a proposed settlement that, if approved by the court, would resolve the Department’s competitive concerns.

According to the Department’s complaint, Amcor and Bemis both supply three types of heat-seal, coated medical packaging products critical to the safe transportation and use of medical devices: medical-grade Tyvek rollstock, medical-grade paper rollstock, and medical-grade Tyvek die-cut lidding.

Due to Amcor’s and Bemis’s collective overall expertise in meeting the needs of doctors and hospitals, Amcor and Bemis are two major competitors supplying these products.

According to the complaint, the combination of Amcor and Bemis would eliminate head-to-head competition between the companies in the markets for these products and threaten the benefits that medical care providers have realized from that competition in the form of lower prices and better service.

Under the terms of the proposed settlement, Amcor must divest manufacturing facilities located in Ashland, Massachusetts; Milwaukee, Wisconsin; and Madison, Wisconsin; along with certain related assets, to Tekni-Plex Inc., or an alternate acquirer approved by the United States.

Tekni-Plex is an international leader in flexible films and medical supplies.

Amcor, headquartered in Zurich, Switzerland, had total sales of over $9 billion in 2018, including approximately $288 million in sales of flexible packaging for medical use in the United States.

Bemis, a Missouri corporation headquartered in Neenah, Wisconsin, had total sales of over $4 billion in 2018, including approximately $260.9 million in sales of flexible packaging for medical use in the United States.


What to read next

Amcor to buy rival Bemis for $5.25 billion
Highlights: August 6 - August 10, 2018
Amcor to acquire U.S. plastics business for $280 million