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EU Commission delays Crown Holdings Mivisa takeover

By Jenny Eagle+

Last updated on 26-Feb-2014 at 14:14 GMT2014-02-26T14:14:47Z

EU Commission delays Crown Holdings acquisition of Mivisa
EU Commission delays Crown Holdings acquisition of Mivisa

The EU Commission has delayed the deadline for Crown Holdings acquisition of Mivisa, from February 28 to March 14, according to reports in the Official journal for the European Union.

The consumer goods packager and private equity-owned Mivisa, Spain's largest producer of tin packaging, made a set of proposed commitments to the European Union's antitrust regulator to obtain approval for its €1.2bn ($1.65bn) merger , the commission said.

Impact on the food packaging industry

In a notice posted online, the European Commission announced it had received a series of potential concessions designed to allay competition concerns over Mivisa’s acquisition by Philadelphia-based Crown, which derives slightly less than 40% of its revenue.

Crown Holdings declined to comment on the acquisition when contacted the firm.

However, in a statement by the European Commission directorate-general for competition it said the proposed transaction has an impact on the food packaging industry, and in particular on metal food cans, ends and closures.

Mivisa is active in the manufacture and sale of steel (tinplate) two-piece and three-piece food cans. It also produces metal closures and can ends,” it said.

Crown is active in the same markets and segments. Crown is also active in the production and sale of can making machines, mainly for beverage cans.

EU Member States

Mivisa sells metal food cans in the following EU Member States: Spain, Portugal, France, Belgium, The Netherlands, Germany and Hungary. Crown is also present in all of these countries.

Moreover, Crown and Mivisa are both present in the market of metal closures and in the merchant market of food can ends, with sales in the EEA.

Therefore, the proposed transaction will give rise to an overlap on the metal food cans markets in the Iberian Peninsula, France, Benelux, Germany and Hungary, and, to a lesser extent, in the can ends and metal closures markets.”

It added the Competition directorate-general makes the information provided by the notifying parties in section 1.2 of Form CO available to the public to increase transparency and Crown has proposed commitments that will reduce the overlap in some of these Member States and will solve any competition concerns.

Sole control of Mivisa

The transaction consists in the acquisition by Crown of sole control over Mivisa.

The report added: ‘On 24 January 2014, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 by which the undertaking Crown Holdings, Inc. (‘Crown’, USA) acquires within the meaning of Article 3(1)(b) of the Merger Regulation sole control over Mivisa Envases, S.A.U. (‘Mivisa’, Spain) by way of purchase of shares.

‘The business activities of the undertakings concerned are: for Crown: design, manufacture and sale of packaging products for consumer goods, including metal food cans, can ends and closures, and for Mivisa: manufacture and sale of metal food cans, can ends and closures.

On preliminary examination, the Commission finds that the notified transaction could fall within the scope the EC Merger Regulation. However, the final decision on this point is reserved.’

The Commission invited interested third parties to submit their possible observations on the proposed operation to the Commission. That deadline has now passed.

If the commission decides to block the sale or if the deal isn't consummated before September 5, Crown has agreed to hand over a multimillion-dollar transaction fee to affiliates of Mivisa's seller The Blackstone Group, according to a US Securities and Exchange Commission filing Crown made when the acquisition was announced in October, 2013.

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