The boards of directors of Avery Dennison Corp. (Pasadena, Calif.) and Paxar Corp. (White Plains, N.Y.) unanimously approved an agreement for Avery Dennison to acquire all outstanding shares of Paxar for $30.50 per share in a cash transaction valued at $1.34 billion. The transaction is expected to enhance Avery Dennison's ability to compete and grow in the fragmented global retail market.
"This combination will give us the capabilities, products and geographic reach to pursue new segments of the global retail information and brand identification market. These segments include retailers and manufacturers serving local customers in India and China," said Dean A. Scarborough, president and CEO of Avery Dennison.
"Lower-cost production--and higher levels of quality and speed of delivery--will be crucial for winning against the local and regional competition we face at the buying office and factory levels," said. Scarborough. "This combination will benefit the factories that purchase our tickets and tags as well as the retailers and the brand owners they supply."
Next the two companies will develop an integration plan that retains the best systems and people from both organizations. "While there will be a reduction in overlapping positions, employees will be part of a stronger, more rapidly growing global business," said Scarborough. "We plan on retaining top-notch talent to ensure that we are the best in the industry."
Avery Dennison makes and markets pressure-sensitive labels, office products and retail tag, ticketing and branding systems. It reported 2006 sales of $5.6 billion. Paxar designs and manufactures tickets, tags and labels, and provides printers, software control systems and related supplies for retail product identification. Paxar reported 2006 sales of $881 million.