Trancontinental (TC), Canada's largest printing company and one of the leading packaging suppliers in North America, has made a $1.32bn offer to purchase Coveris Americas.
If successful, the purchase will make TC the seventh largest packaging company across North America, with Coveris being a key player in the flexible plastic and paper products business.
The deal continues to bolster TCs strategy of altering its offerings amidst a downturn in newsprint industry.
“We believe this transaction is entirely consistent with the company’s transformation from printing to packaging as well as the desire to consummate a larger acquisition,” said RBC Capital Markets analyst Drew McReynolds, according to Reuters.
If the deal is successful, TC will take control of Coveris Americas's 21 facilities that are used for the production a range of goods such as labels and shrink films.
As a result, Coveris would be left with 44 production facilities in 14 countries across the world, with the cash generated from the sale to be used to pay off the firm's existing debt.