(Reuters) - Packaging firm Liqui-Box Corp on Monday agreed to sell its bag-in-box business to Peak Packaging to comply with requirements from Britain's competition watchdog over the U.S.-based company's takeover of DS Smith's (L:SMDS) plastics business.
Britain's Competition and Markets Authority (CMA) was investigating whether Liqui-Box's $585 million takeover of the DS Smith business would reduce competition.
The watchdog said in July that food and drink suppliers might have to pay higher prices and have less choice for packaging if the merger went ahead.
But the CMA concluded its investigation on Sept. 30, after agreeing to certain undertakings provided by Liqui-Box.
"We're happy to have clearance now in the U.K. and move one step closer to completing the acquisition of the DS Smith Plastics Division," Liqui-Box CEO Ken Swanson said.
Liqui-Box, owned by private equity firm Olympus Partners, said it would sell its bag-in-box (BiB) business which caters to customers in Britain. A BiB is a type of container for the storage and transportation of liquids.
The company said customers outside of Britain would continue to be served from Liqui-Box's plant in Wythenshawe, along with other locations.
Liqui-Box's planned takeover of DS Smith's business adds to a long list of M&A deals in the packaging sector, which private equity firms have been focusing on for its stable cashflow and demand from online shopping.
DS Smith, which supplies packaging products to companies including Amazon.com (O:AMZN), announced the sale of its plastics division in March.