Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Private Equity Firm Receives European Commission Approval for Acquisition of Personal Care Packaging Business, (Oct 30, 2012)

By Jeffrey May, J.D.

The European Commission (EC) announced on October 30, 2012, that it had cleared Sun Capital Partners Fund V L.P.'s proposed acquisition of Rexam PLC's cosmetics, toiletries, and household care products packaging business.

U.S.-based private equity fund Sun Capital already has a European-based cosmetic and personal care packaging manufacturer in its portfolio of companies—Albéa. However, the EC concluded that, despite the acquisition, customers in the cosmetics and perfume industry will continue to have alternative suppliers for cosmetic packaging. Thus, the transaction would not significantly impede effective competition in Europe.

United-Kingdom-based Rexam, a global consumer packaging company, announced the proposed sale in July. The company said that Sun Capital offered $459 million for the assets. At the same time, Rexam said that it intended to sell its high barrier food packaging business to Silgan Holdings Inc, a U.S.-based supplier of packaging for consumer goods products, for $250 million.

According to the EC announcement, the investigation into Sun Capital's acquisition of the Rexam assets considered the competitive effects of the proposed acquisition in the markets for mascara wands and lipgloss applicators, lipstick applicators, fragrance caps, and cosmetic closures.

The EC also investigated the vertical link between the Rexam unit's activities in airless and lotion pumps and Albéa's plastic and laminated tube business. Many tube manufacturers purchase airless pumps in order to provide customers with an airless dispenser tube. The investigation found that competing tube manufacturers would have alternative sources for pumps. It is also unlikely that the merged entity would stop supplying competing tube manufacturers with Rexam PC pumps.

News: Antitrust