CMA raises concerns over Liqui-Box’s proposed takeover of DS Smith unit
The Competition and Markets Authority said on Friday that Liqui-Box’s proposed takeover of DS Smith’s rigid and flexible packaging business could leave food and drink suppliers worse off.
As part of its initial, Phase 1 investigation into the takeover, the watchdog found that Liqui-Box and DS Smith are two of the four main companies in the UK offering a specialist type of packaging called Bag-in Box to food, wine, dairy and drink suppliers.
"If the deal is allowed to go ahead as planned, the CMA is concerned it could create insufficient competition in the supply of these products, leading to their customers potentially having less choice and paying higher prices, especially as there are very few large suppliers in the UK," it said.
It also highlighted concerns that the reduction in competition could lead to lower quality products and/or a poorer service.
If the businesses are unable to address the CMA's concerns, the deal will be referred for an in-depth Phase 2 investigation.
US-based flexible packaging solutions company Liqui-Box agreed back in March to buy the division from DS Smith.
At 0815 BST, DS Smith shares were down 0.8% at 360.40p.