DS Smith Warned by Antitrust Body over Sale of Assets to Liqui-Box

SEATTLE (Scrap Monster): The Competition and Markets Authority (CMA) blocked the announced sale of assets of DS Smith to U.S.-based Liqui-Box, raising concerns on the possible impacts it could cause in market. It noted that customers could get a worse deal, on account of the transaction.

Earlier in March this year, U.S-based Liqui-Box had announced plans to purchase DS Smith’s rigid and flexible packaging business for a sum of approximately $585 million. This transaction has now been questioned by the Authority, stating that the deal could lead to reduced market competition, which in turn may result in poorer service and lower quality products. The deal could lead to less choice to customers and hiked prices, it said. Incidentally, Liqui-Box and DS Smith are two of four companies that offer specialist Bag-in-Box packaging to food and drinks suppliers in the UK.

The UK’s anti-trust enforcement authority threatened to subject the deal to extra merger scrutiny unless the companies propose adequate solutions to address the anticipated reduction in the number of British liquid packaging suppliers caused by the merger. The authority is mulling to conduct a Phase-2 in-depth investigation into the proposed purchase of DS Smith’s plastics division by Liqui-Box.

The deal comprises of DS Smith’s various plastics operations including flexible plastics, rigid plastics and foam products. It covers 26 sites across 12 different countries, employing around 2,000 staff.