EU opens anti-competition investigation into Mondi-Walki deal

On 2 September the European Commission announced an examination of where a proposed buy-out would unduly damage competition in Europe’s food contact material market.

The hearing is being held in response to the announcement on 22 May that Mondi was going to acquire two extrusion coating plants from Walki. Extrusion coating is used to add water-resistant barriers to paper and paperboard food packaging, as well as other fibre products like stationery, and insulation materials used in construction.

South Africa-headquartered Mondi is poised to pay €60 million for the facilities at Pietarsaari in Finland, and Wroclaw in Poland.

In a press release, the commission notes that Mondi already operates four extrusion coating sites in the EU – in Austria, Belgium, the Czech Republic and Sweden. The size of the new combined extrusion coating business could squeeze competitors and ultimately limit competition in the region.

European commissioner for competition Margrethe Vestager says: ‘The proposed merger could remove a key competitor for several types of packaging material. These are used in everyday items such as food packaging.

‘I am concerned that the merger would lead to higher prices and less choice for these companies’s clients, and that the price increases could ultimately be passed on to consumers.’

European authorities now have until 18 January 2016 to investigate the impact of the proposed purchase.

This article comes from Food Contact World, which provides exclusive news and analysis on developments in digital print trends, markets, and technologies.