US company Avery Dennison has signed an agreement to sell its package label converting business in Europe to CCL Industries, a label and packaging solutions company based in Toronto, Ontario.
Cash proceeds from the sale are expected to be approximately $60 million (€52.7m). In addition, the deal includes a long-term, global supply agreement for Avery Dennison to provide pressure-sensitive base materials to CCL Industries. This supply contract, according to Avery Dennison, is expected to generate revenue in 2004 that will offset the decrease in its sales resulting from the divestiture. The transaction is expected to be finalised during the third quarter of 2003, subject to meeting customary closing conditions, including regulatory approvals.
"Divesting these package label converting operations in Europe is an important part of our strategy to focus on our key global businesses in pressure-sensitive adhesive materials, office products and retail information services," said Philip M. Neal, chairman and chief executive officer of Avery Dennison. "We will continue to invest in growing our existing operations in Europe, particularly in developing Eastern European markets."
The transaction involves the sale of two Avery Dennison package label converting facilities in Denmark, located in the cities of Brondby and Randers, as well as a package label converting plant in Chilly-Mazarin, France. The business serves European customers in the food, pharmaceuticals and cosmetics markets with customised, self-adhesive labels for product packaging. The 325 Avery Dennison employees at the three operations will become employees of CCL Industries and the transition is expected to be seamless for customers of these operations.
Avery Dennison is a global leader in pressure-sensitive technology and innovative self-adhesive solutions for consumer products and label materials. Based in Pasadena, California in the US, the Company had 2002 sales of $4.2 billion.