Brussels, 10th November 2005
Mergers: Commission approves acquisition of Kappa Holding B.V. by Jefferson Smurfit, subject to conditions
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the Dutch company Kappa Holding B.V. (“Kappa”) by the Irish based international packaging group, Jefferson Smurfit (“JSG”), subject to conditions. The Commission found that the proposed transaction gave rise to competition concerns in various countries as regards corrugated boxes and solid board boxes, graphic board and solid board partitions, all products used in the packaging industry. However, the parties have offered remedies that remove the concerns identified by the Commission.
Competition Commissioner Kroes commented "The proposed remedies will remove the competition concerns and therefore maintain effective competition on all affected markets.”
JSG is an international packaging group with operations in Western Europe and Latin America, active in the manufacturing and sale of corrugated case materials, sheets, and boxes and the recovery of recycled wastepaper. JSG is jointly owned by Madison Dearborn Partners, a private equity business, and by its own management.
Kappa is active in the manufacturing and sale of corrugated case materials, corrugated and solid board sheets, corrugated and solid board, graphic and specialty board and the recovery of recycled wastepaper. Its operations are situated mainly in Western and Eastern Europe. It is jointly owned by CVC, Cinven and by its own management.
The operation as initially notified to the Commission raised serious competition concerns in the markets of corrugated boxes, solid board boxes, graphic board and solid board partitions.
The market investigation carried out by the Commission confirmed that the proposed transaction would:
In order to remove these competition concerns, the parties offered the following commitments:
These commitments will considerably reduce the parties’ share and they will significantly reduce or completely remove the overlap in the markets and geographic areas concerned. The Commission considers that these commitments are appropriate to remedy the competition concerns.