Canadian labelling solutions specialist CCL Industries is to purchase German label converter Steinbeis Packaging for Cdn$80M. The acquisition, coupled with the new investments in Eastern Europe and China, will give CCL more than 30 sites worldwide and total revenues of approximately Cdn$650M.
Donald G Lang, president and ceo of CCL, states: "This transaction accelerates our strategy of servicing our customers on a global basis and transforms our current business into the largest and fastest growing label network in Europe and Asia."
Last July, CCL announced its intention to merge its European and Asian label operations with Steinbeis to form a joint venture owned by the two companies. However, during negotiations, it was agreed that an outright purchase of the business "would better enable synergies to be developed on a global basis". In 2004, sales from Steinbeis Packaging plants in the US, France, Germany and China totalled some Cdn$140M.
CCL plans to continue to build its network and increase investment in its European and Asian label manufacturing facilities. This will include capital investments of Cdn$18.5M to increase capabilities in the fast growing markets of Eastern Europe and China. Two new state-of-the-art greenfield plants are under construction in Poznan, Poland, and Guangzhou, China, with capacity planned to come on line in the second half of 2005.
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