Amcor Ltd., Australia’s biggest packaging company, may face objections from antitrust regulators in any bid for parts of Rio Tinto Group’s Alcan packaging unit, said JPMorgan Chase & Co. and Merrill Lynch & Co.
“We expect Amcor would face significant competition hurdles as the combined entity would be a clear number one in most markets,” JPMorgan analysts led by Sydney-based Andrew Scott said in a report yesterday. “Assuming Amcor overcomes competition and other hurdles, we believe that any acquisition by Amcor would be positive.”
Amcor said in February it was in talks to acquire parts of London-based Rio’s packaging group being sold to cut debt. The company is seeking to sell A$1.6 billion ($1.3 billion) of debt and A$1.2 billion in shares to fund the acquisition, the Australian Financial Review said today. The sale may be completed next week, the report said.
“Amcor and Alcan are among the market leaders in tobacco, food and pharma-medical” packaging, Merrill Lynch analysts led by Sydney-based Mario Maia said in a report yesterday. “Given their strong position in these segments, certain operations may require regulatory approval.”
Amcor fell 0.4 percent to A$4.69 at 10:16 a.m. Sydney time on the Australian stock exchange. The stock has dropped 19 percent this year and has a market value of A$4 billion.
Bemis Co., the largest producer of flexible plastic packaging in the Americas, yesterday agreed to acquire the Food Americas business of Alcan Packaging from Rio for $1.2 billion.
A combined Amcor and Alcan packaging group would control about a 48 percent of the market in tobacco packaging in Western Europe and 53 percent in eastern Europe, Merrill Lynch said. It would also control 45 percent of the market in medical and 56 percent of pharmaceutical packaging, mainly in the U.S., it said.
Amcor spokesman John Murray couldn’t immediately be reached for comment.
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Tobacco is an annual or bi-annual growing 1-3 meters tall with large sticky leaves that contain nicotine. Native to the Americas, tobacco has a long history of use as a shamanic inebriant and stimulant. It is extremely popular and well-known for its addictive potential.
Nicotiana rustica leaves.
Nicotiana rustica leaves have a nicotine content as high as 9%, whereas Nicotiana tabacum (common tobacco) leaves contain about 1 to 3%
A cigar is a tightly rolled bundle of dried and fermented tobacco which is ignited so that its smoke may be drawn into the mouth. Cigar tobacco is grown in significant quantities in Brazil, Cameroon, Cuba, Dominican Republic, Honduras, Indonesia, Mexico, Nicaragua, Sumatra, Philippines, and the Eastern United States.
Tobacco is an agricultural product processed from the fresh leaves of plants in the genus Nicotiana. It can be consumed, used as an organic pesticide, and in the form of nicotine tartrate it is used in some medicines. In consumption it may be in the form of cigarettes smoking, snuffing, chewing, dipping tobacco, or snus.
