Amcor bids to be market leader with Chinese flexible packaging deal

The acquisition of Jiangsu Shenda Group for RMB350m (A62.20m) represents eight times calendar year 2012 EBITDA, said the firm. Jiangsu Shenda Group has sales of RMB440m and two plants in the Jiangsu province in Eastern China. Two thirds of sales are to the pharmaceutical, snacks and culinary end markets. Attractive market Ken MacKenzie, Amcor’s managing director and CEO, said: “Continued strong growth in consumer spending makes China one of the most attractive markets globally. “Amcor has a strong and successful position in the Chinese flexible packaging market with nine plants, covering all the key regions and sales of over A$400m.” The firm said the business fits with their existing plant in Jiangsu province and enables sharing of overheads, optimisation of production across the sites and operating improvements through sharing of best practice. These opportunities are expected to deliver cost synergy benefits of more than 5% of sales. “This acquisition establishes Amcor as the market leader in Eastern China, a region that represents approximately 40% of China’s GDP,” added MacKenzie. “The business is a strong fit with our existing operations and offers considerable synergy opportunities.” The agreement is subject to regulatory and other usual conditions and is expected to close in the coming months. Former paper-based packaging site Meanwhile, Amcor has reached agreement, subject to expected regulatory approvals, to sell its property in Fairfield for a consideration of $120m, with the profit on the sale anticipated to be $60m. Proceeds will be paid progressively over a four year period with Amcor receiving a $10m deposit on exchange of contracts. The purchaser is a consortium led by Alpha Partners Pty and a company associated with Glenvill Group.

Amcor bids to be market leader with Chinese flexible packaging deal

Amcor has snapped up a Chinese flexible packaging firm claiming the deal will make it the market leader in Eastern China with a strong position in both film manufacturing and conversion.

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