Commission approves merger between Amcor and Bemis, subject to conditions

February 13, 2019 Off By Sebastian Reisig

The European Commission has approved, under the EU Merger Regulation, the merger between Amcor and Bemis. Both companies manufacture flexible packaging products worldwide. The approval is conditional on the divestment of Bemis’ medical packaging business in Europe.

Amcor and Bemis are both global manufacturers of packaging solutions worldwide, supplying a broad range of rigid and flexible packaging products for many different sectors, including the food, consumer, medical and pharmaceutical industries.

The Commission’s investigation

The Commission examined in particular the effects of the proposed transaction on competition in the markets for the supply of flexible packaging for (i) medical use and (ii) for food products in the European Economic Area (EEA), where the activities of Amcor and Bemis overlap.

As regards flexible packaging for medical use, Amcor and Bemis are the most significant players in the EEA and have been competing closely. The merged entity would have created a player three times larger than the second largest supplier, on a fragmented market with many small suppliers. The Commission found that barriers of entry are extremely high on this market, and customers do not easily switch suppliers. As a result, the Commission was concerned that the transaction as notified would negatively affect competition on the market for flexible packaging for medical use and could lead to higher prices, less choice and less innovation.

As regards flexible packaging for food products, the Commission concluded that the proposed merger would raise no competition concerns due to the presence of a large number of alternative suppliers, lower barriers to entry and because it is easier for customers to switch to alternative suppliers.

The proposed remedies

To address the Commission’s competition concerns, Amcor and Bemis offered to divest Bemis’ entire medical packaging business in the EEA.

The commitments fully address the Commission’s concerns as they remove the entire overlap between the companies’ activities in the supply of flexible packaging for medical use in the EEA.

Therefore, the Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns in the EEA. The decision is conditional upon full compliance with the commitments.

International cooperation

Given the worldwide scope of the companies’ activities, the Commission has cooperated closely with the US Department of Justice.

Companies and products

Amcor, based in Australia, is a global supplier of packaging solutions. It supplies a broad range of rigid and flexible packaging products into the food, beverage, medical, pharmaceutical, personal care and other consumer goods sectors.

Bemis, based in the US, is a global supplier of packaging products. It supplies rigid and flexible packaging for the food, consumer, medical, pharmaceutical and other industries.

Merger control rules

The transaction was notified to the Commission on 12 December 2018.

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).