WASHINGTON – On Feb. 24, the Department of Justice (D.O.J.) announced it had reached a settlement requiring Bemis Company Inc. to divest certain assets used in the production and sale of flexible packaging for natural cheese and fresh meat in order to proceed with its acquisition of the Alcan Packaging Food Americas business from Rio Tinto plc, parent company of Alcan Corporation. The acquisition is valued at approximately $1.2 billion.

According to the D.O.J., the acquisition as originally proposed would combine Bemis and Alcan, two of the leading U.S. manufacturers of flexible-packaging rollstock for chunk, sliced and shredded natural cheese packaged for retail sale and flexible-packaging shrink bags for fresh meat. Without the divestitures, the acquisition would lead to higher prices, lower quality, less favorable supply-chain options, reduced technical support and less innovation.

As a result, a civil antitrust lawsuit was filed by the D.O.J.’s Antitrust Division on Feb. 24 in the U.S. District Court for the District of Columbia to block the proposed acquisition. The department also filed a proposed settlement at the same time that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.

"The acquisition, as originally proposed, would have lessened the vigorous competition that currently exists among suppliers of flexible packaging for natural cheese and fresh meat," said Christine Varney, assistant attorney general in charge of the Department of Justice's Antitrust Division. "These divestitures will preserve competition in the markets for flexible-packaging for these products, which allows for lower prices, higher quality and more innovation, benefiting consumers."

The department's complaint alleges the proposed acquisition would reduce competition substantially in the already highly concentrated market for shrink bags for fresh meat, among other things.

Terms of the proposed settlement require the companies to divest all of Alcan's contracts and intellectual property as well as plants located in Catoosa, Okla., and Menasha, Wis., along with certain other assets necessary to the manufacture of flexible packaging for natural cheese and fresh meat.

Bemis is a Missouri corporation with its principal place of business in Neenah, Wis. Bemis and its subsidiaries -- including Curwood Inc., which is Bemis's subsidiary that produces flexible packaging for cheese and meat -- made approximately $3.8 billion in sales in 2008 -- $2.1 billion of which was attributable to the sale of flexible packaging in the U.S.

Rio Tinto plc, parent of Alcan Corporation, is a United Kingdom-based global mining corporation. It made approximately $58 billion in sales in 2008. The sales of the Alcan Packaging Food Americas business amounted to approximately $1.5 billion in 2008.