Rank makes bid for SIG as part of global strategy

By Ahmed ElAmin

- Last updated on GMT

Related tags: Sig, Private equity, Leveraged buyout

A €1.5 billion offer for Switzerland-based SIG Holding marks an
attempt by a New Zealandbillionaire to put together a global force
in packaging.

If the SIG takeover goes through, Rank Group would become the world's second largest producer of beverage packaging after Swedish-owned TetraLaval, according to media reports. SIG had sales of €1.2bn last year from products such as cartons for long life drinksand PET bottles.

The purchase would add to Rank's considerable holdings in the global packaging industry, aportfolio that the investment company has been building for the past year. For processors SIG willbecome part of a larger supplier, giving the company more leverage over setting prices for itspackaging. On the positive side, a larger group might also be able to produce more innovativeproducts, offer a wider array of options and provide a more international service to multinationals.

"Rank sees in SIG a well-managed company, which complements its existing interests and would give Rank an important strategic advantage in terms of size, market presence and global reach,"​ the company stated in a press release.

The CHF2.4bn ( US$ 1.96bn) cash offer for SIG was announced this week. SIG's board of directorssaid it is currently reviewing the bid. Rank Group is under the control of New Zealand billionare GraemeHart. The bid is an increase on the rival bid made by CVC Capital Partners and Ferd, a Norwegian private equity group.

Earlier this year Hart bought Carter Holt Harvey, the New Zealand forestry and packaging groupfor NZ$3.3bn (€1.7bn).

Hart has since sold the company's forestry unit to US-based Hancock Group for about NZ$1.5bn (€792m).This month he also agreed to purchase International Paper'sdrinks packaging business for NZ$725m (€382.8m).

International Paper's drinks packaging business sells products such as liquid paperboard packaging for dairy productsand juice. The unit has plants in North America and Asia.

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