Adhesives Magazine

Department of Justice To Block Raflatac/MACtac Deal

June 2, 2003
WASHINGTON — The Department of Justice (DOJ) announced that it intends to file a civil antitrust lawsuit in the U.S. District Court in Chicago to block UPM Kymmene’s Raflatac subsidiary from acquiring Bemis Corp.’s MACtac subsidiary. Raflatac and MACtac are the second and third largest producers of pressure sensitive labelstock in North America.

The DOJ concluded that the merger would facilitate coordination between the merged company and other North American producers of bulk paper labelstock, and would substantially reduce competition in the production of bulk paper labelstock for use in variable information printing and prime labeling. The merger would result in higher prices for bulk paper labelstock throughout the United States, the department said.

Headquartered in Helsinki, Finland, UPM proposes to pay approximately $420 million for MACtac, including its labelstock plants in Stow, Ohio; Nellis, Nev.; and Scranton, Pa., as well as assets in Europe. In 2002, Bemis generated worldwide revenues of $2.4 billion, of which $499 million was produced by its MACtac division.