Under its EU Merger Regulation, the European Commission (EC) has cleared the proposed acquisition of SCA Packaging, a subsidiary of the Swedish group Svenska Cellulosa Aktiebolaget (SCA), by DS Smith Plc, based in the UK. SCA Packaging and DS Smith both produce corrugated packaging. The clearance is conditional upon the divestment of a number of production plants in the U.K. and France.
The EC notes that a preliminary investigation that it conducted showed that the proposed transaction would have endangered competition for some types of packaging in the two countries. The commitments offered by the parties address the concerns.
To remedy the situation, DS Smith and SCA Packaging have offered to divest one of their two U.K. plants producing heavy duty corrugated packaging and one plant producing litho-laminated corrugated packaging. The divestments entirely remove the increment resulting from the merger in these product areas. In addition, the merging parties committed to divest one of their three plants in Brittany which would eliminate any overlap resulting from the proposed transaction. The EC's investigation showed that the divested businesses would be viable and that the commitments would resolve all identified competition concerns.
In view of the remedies proposed, the EC concluded that the proposed transaction, as modified, would not significantly reduce competition in all or part of the EEA. This decision is conditional upon full compliance with the commitments.
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