Sidel deal gives Tetra crucial leverage

Although the future of the EC Merger Regulations Committee might have been thrown into doubt, the recent overruling that allows Tetra Laval to go ahead with its plans to acquire Sidel paves the way for an increased presence in the world market for PET production.

Privately owned by the Swedish Rausing family, Tetra Laval's fortune has been built on developing systems to pack drinks, liquid foods and dairy products in laminated paper cartons. Currently the company has about a 50 per cent share of the world market for such products and had a turnover of €8.5bn last year, according to a report in the Financial Times.

However, the empire upon which the Tetra Laval fortune has been built is a relatively stagnant one, with growth stuck at just 3 to 4 per cent a year. The market Tetra Laval has been wanting to increase its presence in is that of PET, which has recently been enjoying annual growth rates of 10 per cent.

The move to buy up Sidel will give Tetra Laval a strong position in the equipment used to make plastic bottles, the technology side of the business. But if the Sidel deal does eventually go through it will probably not be the final acquisition in plastics, indeed it will probably be the first in a series of acquisitions that will eventually make Tetra Laval a dominant name in PET.