GERMANY – SIG Combibloc a Swiss manufacturer of packaging materials and equipment for the food industry has agreed to acquire the remaining 50% stake in its Middle East & Africa (MEA) joint venture from its partner Obeikan Investment Group (OIG).
The joint venture, SIG Combibloc Obeikan was established in 2001 as a 50:50 joint venture between SIG and OIG.
The company supplies a range of SIG filling machines, aseptic carton sleeves and closures to customers in the MEA region – where it is present in 17 countries – from a manufacturing plant in Riyadh, Saudi Arabia.
Following completion of the transaction, the MEA business will become a full member of the SIG group and the plant will be fully integrated into SIG’s global production network.
According to a report by FoodBev, SIG will fund the deal through selling 17.5 million shares and a cash consideration of €167 million (about US$ 198.84 million).
The acquisition demonstrates SIG’s commitment to expanding its global footprint, as it aims to leverage growth opportunities in the local area.
According to data from MarketDataForecast, the Middle East and Africa Food Packaging Market currently estimated to be worth US$23.49 million is expected to grow at a CAGR of 7% in the next five years to reach US$28.58 in 2025.
100% control of its MEA operations will thus give SIG Combibloc more leeway to control its operations and position itself for future growth.
“I am very pleased to see this culmination of the strong relationship we have had with OIG over the years. This is a unique opportunity to acquire a high-quality asset which we know very well,” Rolf Stangl, CEO of SIG, said.
“SIG Combibloc Obeikan is a leading player in meeting the growing demand for aseptic cartons in MEA and will be an additional driver of growth in our portfolio.”
The completion of the transaction is subject to several customary closing conditions, including Saudi Arabia and certain other antitrust approvals.
Last year, SIG Combibloc agreed to acquire Visy Cartons, which produces SIG aseptic cartons for sale in Australia and New Zealand, for AUD 70 million (US$48.2 million).
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