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The mbadive acquisition of Tannpapier by Mayr-Melnhof Karton (MM) to the tune of 275 million euros strengthens the global presence.
5:30 am, October 20, 2018
We are ready, we are looking for, we are knocking at every door, we are brave – but not arrogant. " That said Wilhelm Hörmannseder, CEO of the Mayr-Melnhof Karton (MM) publicly traded packaging group (MM) in the spring at the presentation of the solid balance sheet of 2017. Yesterday, a major purchase was announced: the group buys Tannpapier for 275 million euros. With this, MM expands its global presence.
Tannpapier, a Traun-based cigarette filter specialist in Upper Austria – by far the world's largest cigarette filter paper (tipping paper) according to Hörmannseder – has production facilities in Canada, China and Philippines. There is no MM work so far. "This is how we are increasing our global footprint," Hörmannseder said during a conference call with badysts and journalists.
Also concentration at suppliers
MM has been working in the cigarette industry for over 20 years, for example to pack light sticks. Until now, the group has realized about 20% of its turnover with its cigarette business. After the acquisition, it will be "less than 30%," said Hörmannseder. Cigarette consumption is almost stagnant worldwide, according to Hörmannseder.
The increasing concentration of the market among tobacco manufacturers over the years has also led to a concentration among suppliers, notably MM and Tannpapier, said the CEO of MM. "After expanding our position, we will remain one of the leading suppliers," said Hörmannseder about the acquisition.
Tannpapier is basically "close to Mayr-Melnhof" – technologically and geographically. The cost-effective integration process of the company, which has 1,100 employees worldwide, will run smoothly. "Tannpapier is well positioned and healthy and I do not expect significant integration costs, restructuring costs or similar costs," Hörmannseder said. The added value and profitability of MM should be strengthened by the acquisition.
Purchase price of 275 million euros
The 275 million euros paid by Mayr-Melnhof Packaging correspond to 6.5 times Tannpapier's EBITDA (income before taxes, charges and depreciation). The last turnover is 230 million euros per year.
Tannpapier belongs to Eurasia Invest Holding AG, which includes the Trierenberg family. The acquisition is still subject to approval by the competition officials. The closing of the acquisition is scheduled for late 2018 / early 2019. Mayr-Melnhof Packaging is part of the Austrian group Mayr-Melnhof.
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