Sonoco joins race for Crown’s food can business

US consumer packaging group Sonoco Products Company is believed to have joined the race to acquire Crown Holding’s global food can business.

Sonoco has added its name to the list of bidders for the business, which Crown put up for sale following a strategic product portfolio review launched in 2019.

Other potential bidders for the business, which operates in the US and Europe, are said to include private equity firms KPS Capital Partners, Lone Star Funds, Onex Corporation and Platinum Equity (which has a controlling interest in canmaker Ball Metalpack), said the Bloomberg financial news agency.

The news follows a report in the Spanish press that private equity group CVC, also thought to be in the running as a bidder, had dropped out of the race.

While Crown is believed to be seeking a price of more than US$2 billion, this could yet prove a sticking point as the potential bidders are believed to be looking at paying no more than $1.5bn. Crown is reported to be considering pulling the sale if it cannot achieve the asking price.

If Sonoco, based in Hartsville, South Carolina, is successful it would expand the company’s sales in Europe, which currently comprise 20 per cent of its business.

Founded in 1899, Sonoco is a supplier of diversified consumer packaging, industrial products, protective packaging and packaging supply chain services and the world’s largest producer of composite rigid packaging. The only metal packaging it uses is the plain tinplate ends on some of its products.

El País Economía also noted that Lone Star, Platinum and Onex had joined the bidding war for Crown’s Mivisa business in Spain – as well as its other food can businesses in Europe – which it acquired from The Blackstone and Dinamia in 2014.

Mivisa, based at Murcia in Spain is the largest food can producer in both the Iberian Peninsular and Morocco, primarily serving the vegetable, fruit, fish and meat sectors. When it was acquired by Crown, it operated 10 manufacturing facilities, including six in Spain and one in Morocco.

According to Crown’s 2019 results, the food packaging business in Europe recorded sales of $1.9bn and a net profit of $205 million.

Over the past two years, Crown’s competitors in the beverage can sector, Ball and Ardagh, have also sold controlling stakes in their food and aerosol can businesses into joint ventures. In both cases, private equity partners are the controlling shareholders.