Packaging Industry News

COFCO Packaging and Baosteel Packaging are both subsidiaries of state-owned enterprises. In the field of metal packaging, both companies have relatively large market shares and compete with each other. China Baowu's acquisition of COFCO Packaging can complement the shortcomings of the industrial chain. In the future, COFCO Packaging and Baosteel Packaging may be further integrated to improve the company's core competitiveness.
Packaging manufacturer COFCO Packaging announced that the sale of COFCO Packaging shares by China Foods, a subsidiary of COFCO Group, to Changping Industrial, a wholly-owned subsidiary of China Baowu Steel Group, has been approved by the State-owned Assets Supervision and Administration Commission. Previous announcements showed that China Foods owns 29.70% of the issued shares of COFCO Packaging.

The offeror this time is Champion HOLDING (BVI) CO., LTD, which is directly and wholly owned by Changping Industrial and a member of China Baowu Steel Group. On December 6, 2023, COFCO Packaging issued an announcement stating that the offeror planned to acquire all of the more than 1.113 billion issued shares of COFCO Packaging at a price of HK$6.87 per share and privatize it. It is expected to pay a maximum of more than HK$7.649 billion. On the same day, China Foods, the largest shareholder of COFCO Packaging, entered into an irrevocable commitment with the offeror, agreeing and committing to accept the offer for the sale of shares as soon as possible and will endeavor to seek approval from the state-owned assets regulatory agency.

The smooth conduct of this transaction requires antitrust licenses from the State Administration for Market Regulation and other international antitrust review agencies, and approval or authorization of relevant offers from the National Development and Reform Commission, the Ministry of Commerce, the State Administration of Foreign Exchange, and the State-owned Assets Supervision and Administration Commission. The latest announcement from COFCO Packaging shows that the offeror has obtained approval from the State-owned Assets Supervision and Administration Commission for the offer, and the State-owned Assets Supervision and Administration Commission has also approved the transfer of shares from China Foods to the offeror.

It is worth noting that Changping Industrial is not the only one interested in COFCO Packaging shares. On December 11, 2023, COFCO Packaging's second largest shareholder and packager Origen issued a preliminary non-binding letter of intent to COFCO Packaging, planning to launch a voluntary conditional general offer to all its shareholders to acquire all issued shares of COFCO Packaging in cash. . If ORG can complete this transaction, it is expected to gain control of COFCO Packaging.

On February 6, 2024, ORG further announced that its wholly-owned subsidiaries Jinghe Services, Jinghe Packaging and Xiamen Ruibin signed a partnership agreement to establish a limited partnership Huarui Partnership, which is planned to be used to plan the acquisition of COFCO Packaging shares . However, ORG also reminded that “according to relevant publicly disclosed information, this transaction may face competing offers.”