UK competition officials have launched a review of the acquisition of Turpins Packaging Group by US firm Accraply – six weeks after the company announced it had completed the deal.
The Office of Fair Trading (OFT) said Friday it would be studying the transaction that saw Minneapolis-based Accraply expand their shrink sleeve labeling operations with the takeover of England-based Turpins.
But Accraply said it believed the body had no jurisdiction over the acquisition and it expected the deal to buy Turpins to stand.
Merger intelligence unit
The UK firm, headquartered in Clacton-on-Sea, designs and manufactures high-performance shrink sleeve equipment under the Sleevit brand for the food, beverage, cosmetics and pharmaceutical industries.
The company is widely known under its product name and was previous bought in 2005 after a management buyout by Edward Woods and Phil Carter.
Accraply, a subsidiary of Barry-Wehmiller, unveiled the acquisition 16 April and declared its new asset would add to its global footprint for labelling and converting equipment.
A spokesman for the OFT told FoodProductionDaily.com it had not been notified of the acquisition by either party but became aware it had taken place thanks to the work of its merger intelligence department.
Under UK law, companies are not obliged to notify the competition watchdog of takeover proposals but many choose to do so in advance to gain regulatory approval before going ahead, he added.
For the OFT to claim jurisdiction over a transaction where two distinct companies become one enterprise, the turnover of the company to be bought should be at least £70m (€86m, US$108m) or where its acquisition sees the buyer achieving a national market share of 25% or above.
Competition officials will seek to assess if the takeover is expected to result in a substantial lessening of competition.
But Séamus Lafferty, Accraply vice president of sales and marketing declared the firm was convinced the OFT had no valid basis to investigate the deal.
“Accraply believes that its acquisition of Turpins falls outside the criteria requiring OFT approval. We have given maximum cooperation to the OFT, and continue to do so," he said. "It is our expectation that upon a review of the facts, the OFT will not continue any investigation beyond the initial stages.”
The OFT has asked that interested parties comment on the deal before 22 June.
“The purpose of the investigation is to establish if there are competition concerns,” said the organisation's spokesman.
The body can open an investigation after the parties have declared the transaction completed but must reach a final decision within four months.
FoodProductionDaily.com contacted Turpins but nobody from the company was available for comment.