Amcor takeover plan alerts competition watchdog

The packaging giant has capitalised on strong growth opportunities in Asia as talks continue over acquiring the private equity-backed Aperio Group.

The purchase of Catalyst Investment Managers’ flexible packaging business has the potential to almost double Amcor’s market share in that sector. The ACCC is reviewing the potential takeover in regards to market concentration, while unions are concerned at job losses.

Helmed by former Amcor exec Peter Sutton, Aperio is expected to go for around $300 million. The company has extensive flexo and gravure printing capacity across many sites in Australia, NZ and Thailand.

Amcor’s six months ending 2011 reported an after tax profit drop of 9% due to restructuring costs and the strong Australian dollar. However a record underlying profit of 13.9% $304.7 million was realised after taking into account its acquisition of Alcan Packaging and Ball Plastics Packaging.

Earnings for the company’s flexibles business rose 24% despite global economic conditions, Ken MacKenzie, Amcor’s CEO, said. “The first half result represented a record underlying profit, record returns and a record interim dividend for the company.

“The flexible businesses in Asia had a strong half with good growth in all the key markets. This region is particularly attractive due to rising per capita income, increasing populations and introduction by our customers of new product categories.

“Profit before significant items increased 14% to $304.7 million, returns increased from 13.1% to 15.1% and the dividend increased 6% to 18 cents per share. During the half, the company also completed a $150 million share buy-back,” he said.

According to the Financial Review, while Amcor is the front-runner for the Aperio deal it still has to beat fellow bidder Pact Group and an unnamed US flexible packaging company.