Alcan talks still on in wake of Bemis deal, says Amcor

By Gareth Macdonald

- Last updated on GMT

Related tags Rio tinto group Amcor

Australian group Amcor has confirmed that talks about a takeover of Alcan’s pharmaceutical packaging business are still ongoing but says that no binding agreement has yet been reached.

The comments, which echo a statement Amcor released in February, are a response to the acquisition of Alcan’s US food packaging unit by Wisconsin-based plastics company Bemis earlier this month for $1.2bn (€852m).

Alcan's owner, mining giant Rio Tinto, had sought to find a single buyer for the packaging business since 2007. However, after two years without a deal the prevailing wisdom was that Alcan would be sold piecemeal.

The speculation now is that by initiating the break-up Bemis’ deal has and made an Amcor move for Alcan’s pharma unit, as well as its remaining food businesses in Europe and Asia, more likely.

Such an acquisition could cost Amcor up to $2.2bn according to sources quoted by a report in the Wall Street Journal​. If the deal does go through Rio will only be left with Alcan’s cosmetics packaging division

In a note to clients, Citigroup analysts Julian Bu and Scott Hudson said that the deal “would be a sound strategic fit and should allow Amcor to gain meaningful market share and supplier power​.”

Competition issues?

The “meaningful market share​” Amcor would gain may yet prove to be a hurdle according to some observers.

Merrill Lynch analyst Mario Maia told Bloomberg​ that the deal would give Amcor 56 per cent of the global drug packaging market and suggested that this “may require regulatory approval​.”

Andrew Scott at JPMorgan agreed, explaining that: “We expect Amcor would face significant competition hurdles as the combined entity would be a clear number one in most markets​.”

Amcor did not respond to in-PharmaTechnologist’s request for additional comment.

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