Increasing confidence in global packaging sector leads to renewed deals activity in the Midlands

02 April 2014

Increasing confidence amongst global packaging businesses is leading to a renewed focus on merger and acquisition (M&A) activity in the Midlands. This is according to PwC in the Midlands which has advised on a series of global packaging deals over the last year.

PwC has supported a number of major completed deals in the packaging sector through both their corporate finance and transaction services teams. Completed deals include, amongst others, the sale of the pharmaceutical and branded divisions of Chesapeake to global alternative asset manager, The Carlyle Group, and the acquisition of plastic packaging manufacturer M&H Plastics by RPC, one of the world's leading suppliers of rigid plastics packaging. In addition, a number of other transactions are currently ongoing.

Matthew Tombs, deals partner at PwC in the Midlands, said:

“These recent transactions demonstrate how the global packaging industry is returning to deal activity as a route to driving growth, and we are seeing continuing signs of interest in M&A in the local market.

“This trend complements the findings our 17th annual CEO Survey published last month, which found that confidence levels among CEOs in the global packaging sector are growing. up by 12% year on year. But there is recognition within the sector that slow organic growth will increase the focus on strategic alliances, joint ventures and M&A.”

This global picture was also mirrored in the Midlands’ packaging sector. Over three quarters (77%) of senior executives in the Midlands packaging industry who attended a recent roundtable hosted by PwC feel more confident about their business’ present outlook than they did 12 months previously. And when asked about driving growth, over a third (35%) said they saw market competition as the top challenge facing their business, with one in five (19%) identifying domestic M&A as a key growth opportunity. A quarter (23%) of those attending also saw international expansion as an important growth channel.

Contact details:
Email: Matthew Tombs
Tel: 01509 604 089

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Comments

Good post and great to see you guys involved in M&H, seems a lot of the big players view the European and US market as ripe for consolidation, principally due to raw material purchasing economies. I'm still of the view that there's a lot of organic growth to go at with changing packaging materials too.

Thanks Tom - I think you're definitely right that there will be further consolidation to come.

The developments in different packaging materials will be an interesting one to watch - there will likely be winners and losers from these, with those able to respond to the changes most likely to benefit.

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