Australian manufacturers Cardia Bioplastics Limited and Stellar Films Group have entered into a merger agreement, building on the existing cooperation between the two firms. Plans for the merger were first unveiled in late November 2014.
The companies have been working together for three years and teamed up last year to produce environmentally friendly films tailored for the global personal care and hygiene products industry, using Cardia's Biohybrid technology, which combines renewable thermoplastics with polyolefin material.
The merger is expected to create a leader in sustainable packaging with annual sales revenues in excess of A$27 million ($22 million) and expanded production capacity for its proprietary Biohybrid and compostable film products. The combined business will offer a broad range of sustainable product solutions and is expected to benefit from the shift toward more sustainability, particularly in the personal care and hygiene products market.
Cardia Bioplastics will acquire all of the shares and units of Stellar Films in exchange for ordinary shares in Cardia. Following completion of the merger, Cardia shareholders will own 45% of the merged group and shareholders of Stellar Films will own the remaining 55%.
Privately owned Stellar Films manufactures and markets cast films for the personal care, hygiene and medical product industries. It has manufacturing facilities in Melbourne, Australia and Port Klang, Malaysia. The company also holds a 50.8% stake in Malaysia's Akronn Industries Sdn Bhd, a manufacturer of silicone-coated paper and film products.
Cardia develops, manufactures and markets renewable resource-based materials and finished products, derived from its proprietary technology for the packaging and plastic products industries. The company has a global footprint, with headquarters and Global Application Development Centre in Melbourne; a Product Development Centre and resins manufacturing plant in Nanjing, China; and manufacturing plants for film and bag products in Nanjing and in S„o Paulo, Brazil; as well as further offices in Australia, the United States and Malaysia and a network of distributors across the Americas, Asia and Europe.
The merger remains subject to shareholder approval and certain other conditions but is expected to be completed on or about March 20, 2015.
