Avery Dennison sells European label business to CCL.

Toronto-based CCL Industries remains firmly on the acquisition trail. Following the completion of a 51 percent controlled European joint venture with Pachem AG (announced last year), it has snapped up the remainder of Avery Dennison Corporation's European label converting business.

The transaction involves the sale of Avery Dennison's two Danish label converting plants, located in Brondby and Randers, as well as a package/label converting plant in Chilly-Mazarin, France. They all serve European customers in the pharmaceutical, health and beauty aids, food and industrial markets. The three operations have approximately 325 employees, who join the CCL Industries' payroll of about 7,000 people. The group has 35 production facilities in North and Central America and Europe.

The $60 million cash deal also includes a long term agreement for Avery Dennison to provide pressure sensitive base materials to CCL Industries' global plants. The revenue generated by this contract in 2004 is expected to partially offset the decrease in sales resulting from the sale. The transaction is expected to be completed during the third quarter of 2003, subject to customary conditions and regulatory approvals.

The Pachem deal covers pressure sensitive, shrink sleeve and in-mold labels. CCL Label is adding its gravure operation in Avelin, near Lille, in France, to form CCL-Pachem, with headquarters at Pachem's existing facility in Hohenems, Austria. A third production plant is located in Rhyl, North Wales. Technology from the European operations will also be transferred to CCL Label's wholly owned subsidiaries serving global markets.