US SVP cleared by European Commission to buy Linpac
Linpac, which has its HQ in West Yorkshire, UK, makes food packaging and plastic containers, which it sells to retailers, manufacturers, food processors and pharmaceutical suppliers.
Competition concerns
SVP is a global investment firm headquartered in Connecticut that manages hedge funds and private equity funds.
The Commission concluded the proposed transaction would not raise competition concerns as the activities of Linpac and SVP do not overlap and the vertical relationship between them is limited.
The operation was examined under the simplified merger review procedure. FoodProductionDaily.com contacted both companies but they declined to comment on the decision.
Alexander Italianer, directorate-general for Competition, The European Commission, said in a statement, it received notification of the acquisition on October 9, this year, pursuant to Article 4 of the Merger Regulation of the whole undertaking of Linpac Senior Holdings Limited (LSHL) by the purchase of shares.
“After examination of the notification, The European Commission concluded the notified operation falls within the scope of the Merger Regulation and of paragraph 5(c) of the Commission Notice on a simplified procedure for treatment of certain concentrations under Council Regulation (EC) No139/2004,” he said.
“The European Commission has decided not to oppose the notified operation and to declare it compatible with the internal market and with the EEA (European Economic Area) Agreement.”
Linpac Packaging lenders
Founded in 1959 in Louth, Lincolnshire, Linpac is one of Britain's oldest and largest packaging companies. At its peak, the group employed 9,000 people across five continents.
Lenders, including Deutsche Bank and Lloyds Banking Group, took over Linpac in late 2009. The move followed a potential breach of banking covenants by Montagu Private Equity – the private equity firm that bought the business for £860m from the founding family, including Michael Cornish, son of founder Evan Cornish.
Montagu is thought have used around £600m of debt, much of it provided by Deutsche Bank, to finance the deal.
As well as the financial crisis, the business was hit by the decline in sterling and volatile raw materials prices.
Led by chairman, Mark Aldridge, the company sold Ropak, its US rigid packaging business, for £165m in January, 2013, one of a series of disposals since a debt-for-equity swap in 2009.
As a result, sales dropped 31% to £744m in 2012. Debts have also fallen, from a peak of £960m in 2008 to £238m in 2012.
The deal was the latest in a series of disposals by Linpac, including sales of its Australian arm Viscount in August last year and its transit packaging company, Allibert last January.
