Editorial

How mergers and acquisitions are transforming global flexible packaging market

2018 was a watershed year for flexible packaging M&A activity; what does this mean for the industry in 2019?

As the saying goes, it's quality and not quantity that matters. 2018 won't stand out for the number of M&A deals but rather the significance of transactions that did take place.

Rob Gilfillan

Research Analyst

Rob joined Wood Mackenzie in May 2017 as a Films & Flexible Packaging research analyst.

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Amcor's $6.8 billion all-stock acquisition of the US-based converter Bemis is a deal that will shape the industry for many years to come. In addition, both Europe and North America have seen acquisitions of regional significance in the purchases made by Schur Flexibles and Transcontinental Inc., respectively. 

Amcor's transformational acquisition of the US-based Bemis will create a global leader in consumer packaging, with by far the broadest product offering and global footprint, unmatched by any other supplier.

Robert Gilfillan, quoted in Plastics News Europe

We estimate the combined group will account for approximately 10% of the global converted flexible packaging market. Canada's Transcontinental Inc. made its biggest move yet in extending its presence in the packaging industry with the acquisition of Coveris' Americas business, propelling the company into the top ten players in the North American market. 

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Key questions for the global flexible packaging market

According to the research, China now accounts for approximately 15% of the $90 billion global flexible packaging market.

How will the reported slowdown in the Chinese economy, coupled with the uncertainty surrounding US-China trade tariffs, impact the world's second largest flexible packaging market?

Will the country's relatively low consumption per capita offer a potential opportunity for growth? And with China's plastic waste ban creating a domino effect in South East Asia, how are Western nations responding to sustainability pressures without an obvious export market?

These are all important questions that will shape the flexible packaging market throughout 2019.

How will the industry respond to increasing scrutiny?

Recent focus on sustainability, and the inherent difficulties in recycling flexible packaging, has brought the industry and its products into the glare of the mainstream global media. Sustainability is a global issue, necessitating co-ordinated global action, but how are individual national legislatures and transnational bodies responding to calls for new laws and regulations on flexible packaging? 

Europe is currently leading the way in its approach to handling plastic packaging waste. A comprehensive new law that has recently come into effect in Germany, as well as new taxes in France and the UK, are a few examples of how member states are falling in line with the European Union's directive on hitting more ambitious packaging waste recyclability targets. As a high consumption per capita region, Europe is setting a trend for other regions to follow.

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