The transaction is expected to close by the year-end.
Avery Dennison says the deal will enhance its ability to “compete and grow in the fragmented, expanding US$15bn (€11.3bn) plus global retail information and brand identification market”, while both companies emphasise the acquisition is expected to bring US$90-US$100m in annual cost savings within two years.
Dean A Scarborough, Avery Dennison president and ceo, says: “This combination is a terrific strategic fit. Paxar's highly complementary capabilities advance our strategy to deliver exceptional products and superior service to customers at every level of the global retail supply chain, and to increase efficiency and reduce costs in a rapidly changing and increasingly competitive global marketplace. While there will be a reduction in overlapping positions, employees will be part of a stronger, more rapidly growing global business.”
Although the businesses say their combined share of the global market for retail information and brand identification products will be under 10%, they stress the deal will provide growth opportunities. The enlarged product portfolio will include variable data, brand promotion and merchandising labels and tags, woven and printed fabric labels, brand protection and security products, in-plant printers, accessories and supplies, barcode and RFID printers, handheld labellers, labels and tag fasteners, and information management systems. Avery Dennison's Retail Information Services business is reportedly one of its fastest-growing units.
Paxar currently employs some 1,100 staff worldwide, with 38 manufacturing sites in 100 countries on five continents. Its EMEA division is headquartered in Watford, UK.
“Combining with Avery Dennison provides substantial benefits to our customers, while delivering compelling value to Paxar shareholders,” says Rob van der Merwe, Paxar chairman, president and ceo. “Although we understand some jobs will be affected, employees of the combined company will have expanded opportunities as part of a larger organisation.”
Geographically the two companies have complementary strengths - Avery Dennison is especially strong in Asia, while Paxar's major presence is in Europe, the Middle East, Africa and Latin America.
