State of the Industry: Global Consolidation in Packaging

Major trends in packaging M&A

The emergence of a truly global economy has created the necessity of a global strategy. As the industry's top companies continue to grow through acquisitions, they are also aggressively pursuing organic gains in market share. Cost advantages, fueled by economies-of-scale benefits such as strategic sourcing and production crossover, coupled with the need to accommodate global customers, are making it increasingly difficult for the average middle-market producer to compete. Meanwhile, international and cross-border packaging transactions have significantly increased during the past decade. In 2010, 76 percent of plastic packaging deals involved an international participant. This activity amounts to a total of 120 transactions, compared to only 80 transactions in 2003, an increase of 50 percent. Each year global markets are becoming more robust, implying that packaging companies with a strong global presence will be at an advantage going forward as their customers pursue their own global growth opportunities.