Friday, 24 Jul 2020 09:21 GMT

Heidelberg to offload labels business for €120m

Print manufacturing giant Heidelberg has agreed a deal to sell its Gallus Group label printing and folding carton press subsidiary to Swiss packaging business benpac holding for €120m (£109.3m).

Heidelberg says the primary reason behind the sale is to boost its liquidity and group equity at what is a challenging time for the business, due to the ongoing novel coronavirus (Covid-19) pandemic.

Under the agreement, benpac will assume ownership of five Gallus Holding AG sites across Germany and Switzerland, which collectively employ around 430 people.

The deal states that Heidelberg and benpac will work closely together on the Gallus Labelfire digital label press, with Heidelberg to continue supplying the digital printing unit and consumables for the machine.

“We are selling our narrow-web rotary and rotary flexographic printing activities to focus more closely on innovative solutions for the entire printed sheet value chain,” Heidelberg chief executive Rainer Hundsdörfer says.

“We will be retaining our in-house digital expertise and, by collaborating with benpac on the Gallus Labelfire, we will also be making further progress with the digitisation of conventional presses.

This further major boost to our liquidity and group equity will be a big help, especially during the coronavirus crisis

“At the same time, we will remain a major supplier on the growing label market with our sheetfed offset presses.”

The deal is subject to approval by relevant bodies and certain other condition precedents, but Heidelberg says it expects the sale to go through before the end of the year.

Heidelberg chief financial officer Marcus Wassenberg adds: “Our aim is to ensure the long-term financial stability of Heidelberg, and all the measures since our transformation started in March this year have been geared toward this objective.

“Selling the Gallus Group is another key part of our realignment and follows on from the successes we have achieved so far during the transformation process.

“This further major boost to our liquidity and group equity will be a big help, especially during the coronavirus crisis.”

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