The Australian packaging giant put forward the proposal after EU regulators extended its review of the deal by two weeks. The European Commission yesterday announced the new deadline had been pushed back 10 working days from 30 November to 14 December. Amcor said the extension would give more time to “review the need for a potential remedy”.
The company declared that it did not believe any part of the current takeover deal would affect competition in the EU but said it would be prepared to make concessions.
“We anticipate a remedy, if any, would involve the divestment of an Amcor flexible packaging plant with sales of less than $US100m,” said an Amcor statement. “This possible sale of a single plant would not have a material impact on synergies. The combined Amcor and Alcan Packaging businesses in Europe currently have sales of approximately US$4.8bn in 75 plants.”
Approval
Regulatory approval has already been given in Australia, Canada, Russia, Turkey and Ukraine, said the company. It is also expecting to receive feedback from the Department of Justice in the US in the coming weeks.
In August, Melbourne-based Amcor, offered to buy part of Rio Tinto’s Alcan unit - including European and Asian food packaging, global pharmaceuticals and global tobacco units for $2.025bn. Analysts at Deutsche Bank AG estimate the buyout would boost its sales by 50 per cent. Amcor predicts that the Alcan acquisition would give it combined global sales of US$13bn.
Securing European approval is vital to Amcor’s ambitions of becoming a global packaging powerhouse. Last month, company managing director Ken MacKenzie told investors he expected around 85 per cent of its business would be conducted in foreign markets once the merger was completed. He added that Amcor had been preparing for a takeover of this magnitude since 2005 and had had been pruning its portfolio and making divestments in readiness.