The European Commission (EC) has approved the $6.8bn merger of packaging firms Amcor and Bemis, subject to conditions.
The regulator has approved the merger based on the condition that Bemis should sell its medical packaging business in Europe.
Amcor and Bemis supply a range of rigid and flexible packaging products for the customers in multiple sectors.
In August 2018, Amcor agreed to acquire Bemis in an all-stock transaction worth $6.8bn. The combined firm is expected to play a significant role in consumer packaging segment, in addition to providing better value for shareholders, customers and employees.
As per terms of the deal, Amcor shareholders will own 71% stake in the combined company, while the remaining 29% interest will be owned by the Bemis shareholders.
The EC has assessed the effects of the proposed transaction on competition in the markets for the supply of flexible packaging for medical use, as well as food products in the European Economic Area (EEA).
Amcor and Bemis are both significant players in supplying flexible packaging for medical use in the EEA, and the merger entity may affect the small suppliers in the region in terms of competition.
The commission also determined that merger would not affect much flexible packaging category for food products, due to the availability of multiple alternative suppliers.
Both firms agreed to divest Bemis’ entire medical packaging business in the EEA to address the competition concerns of EC.
US-based Bemis is engaged in the distribution of rigid and flexible packaging products to the customers in the food, consumer, medical, pharmaceutical and other industries.
The company has advanced capabilities in polymer chemistry, film extrusion, coating and laminating, printing, and converting.
Bemis, which employs around 16,000 people across the globe, reported net sales of around $4bn in 2017.
Australia-based Amcor supplies a range of rigid and flexible packaging products to the customers in the food, beverage, medical, pharmaceutical, personal care and other consumer goods sectors.