PPL’s shares were up 19.26% since the announcement was made on 8 July 2014 and closed today (21 July) at Rs 170.25, an all time high.

During an interview to CNBC TV 18, after the announcement, Shashank Sinha, executive vice president - flexible packaging, Huhtamaki Oyj, said that it is a global acquisition by the Huhtamaki group. The Indian subsidiary has been acquired for the amount stated and the acquisition in India is debt free and it is funded by the parent company.

He added that the Indian subsidiary of Huhtamaki will buy the Indian company (Positive Packaging in India) and then a foreign subsidiary of Huhtamaki will buy the foreign company (of Positive Packaging).

In a statement issued by Positive Packaging, group chairman, Sanjay N Kriplani, said, “Huhtamaki PPL Ltd will acquire 100% of Positive Packaging India (PPI). The transaction is subject to statutory approvals and expected to close in Q4, 2014. Simultaneously, through a separate agreement, Huhtamaki BV is acquiring Positive Packaging Group, UAE and the various sales offices in South Africa, Ghana, Kenya, etc.”

The Bangalore based RenewSys division of PPI (manufacturing EVA, Backsheet and Alu-Alu), Positive Packaging Nigeria and its associated companies there, are not included in the transaction and remain part of the Enpee Group (PPI’s parent company).

Paper Products, which commands a 65 percent market share in the high-end flexible packaging industry in India (according to a 2012 packaging industry report by a research firm Ancara), is the second biggest flexible packaging company in India after Uflex. While Positive Packaging ranks third in the list.

In the recent past both the packaging majors have acquired label printing firms in India. Huhtamaki PPL invested in Navi Mumbai-based Webtech Labels while Positive acquired SGRE in Bengaluru. These acquisitions were part of series of moves in the Indian label industry, where most organisations are seeking to consolidate.

This big ticket deal is seen as a big leap towards consolidation in the Indian flexible packaging industry, which is also undergoing a transformation.

On this front, Austria-based Constantia Flexibles, the world’s third largest flexible packaging group acquired a 60% stake in Gujarat-based Parikh Packaging in April last year. In 2012, Amcor announced USD 19.8 million acquisition of Daman-based flexible packaging player Uniglobe. In the same year, Max India sold its packaging division, Max Speciality Films, to Germany's Treofan for Rs 540 crore.

The global players are looking to enter Indian market. According to industry experts, as the global retailers seek to establish footprint in the Indian market, global packaging players will need to have a strong presence in the country.