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Arkema Buys Dow’s Flexible Packaging Laminating Adhesives Business

Arkema has agreed to acquire Dow’s flexible packaging laminating adhesives business, a leading producer of adhesives for the flexible packaging market, generating annual sales of around $250 million. According to Arkema, the proposed acquisition will significantly expand its portfolio of solutions for flexible packaging, enabling the group to become a key player in the market. The project is subject to the approval of certain antitrust authorities and is expected to close in the fourth quarter of 2024.

Dow’s flexible packaging laminating adhesives business offers a broad range of high-quality solutions in food and medical applications, where flexible packaging is the optimal solution in terms of efficiency, as well as for industrial lamination, such as window films, and photovoltaic backsheets, among others.

Arkema reports that the flexible packaging market is expected to grow at GDP+ in the coming years, driven in particular by the need for more sustainable and recyclable solutions. Boasting cutting-edge technologies, well-recognized brands such as ADCOTE™ and MOR-FREETM, and five production sites in Italy, the United States and Mexico, Dow’s laminating adhesives business is one of the main historical solutions providers for the packaging industry, with presence in North America and Europe.

Combined with Bostik’s existing commercial presence, product offering and technological breadth for flexible packaging, this operation will enable Bostik to ideally complement its existing business, marking a step change and a unique opportunity for Bostik to position itself as one of the key global partners for customers across the packaging industry.

Beyond benefiting from the underlying growth and the recovery of the market in the coming years, Arkema reports that it aims to rapidly capture new growth opportunities and deliver a high and balanced level of cost and development synergies, which should represent around $30 million in EBITDA after five years.

The proposed acquisition is fully in line with the group’s strategy to expand in superior technologies and growing markets and constitutes another important step to support the future growth of its Adhesive Solutions segment. It is based on an enterprise value of $150 million (around 10 times 2024F EBITDA) and will trigger around $50 million of implementation costs or capex over the next three years.

“We are very happy to announce this great acquisition which is perfectly in line with Arkema’s strategy to offer its customers innovative products with high technological content and continue to grow in the attractive adhesives segment. It will allow the Group and Bostik to broaden its commercial and geographic presence in packaging and complete its product ranges in this demanding and rapidly evolving market, notably regarding sustainable development challenges. We are very happy to welcome Dow’s teams in this new development stage,” said Thierry Le Hénaff, Arkema’s chairman and chief executive officer.

Learn more about Arkema at www.arkema.com. Additional information about Dow is available at www.dow.com

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