Amcor and Huhtamaki are reportedly engaged in negotiations with promoters of Indian tube-packaging company Essel Propack to acquire a controlling stake.

The talks are currently at a preliminary stage, reported, citing unnamed sources in knowledge of the matter.

Essel Propack, which is part of the Essel Group, was founded in 1982 and manufactures laminated plastic tubes to serve clients in the fast-moving consumer goods (FMCG) and pharma sectors.

Offering customised solutions in materials, technology and processes, the company operates 20 manufacturing facilities across 11 countries, including the US, Mexico, Colombia, Poland, Germany, the UK, Egypt, Russia, China, the Philippines, and India.

Morgan Stanley has been appointed by the promoters of Essel Propack to manage the sale.

The source was quoted by the publication as saying: “The talks are at an early stage with two foreign packaging companies, including Amcor and Huhtamaki, but more suitors are likely to join the talks.

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“Apart from the aforesaid suitors, Morgan Stanley has also reached out to other potential suitors, which include private equity funds and strategic bidders.”

“Morgan Stanley has also reached out to other potential suitors, which include private equity funds and strategic bidders.”

The promoters own a 57.19% interest in Essel Propack, whose market capitalisation stands at Rs34.26bn ($471.36m).

The company’s turnover for the 2017 financial year was more than $368m.

Speaking on the motive for the sale of stake in the company, the source added: “The promoters of Essel Propack feel that business growth in the laminated tubes segment will be only in single digits in the foreseeable future and they feel this is an opportune time for them to derive the maximum value, as the company already controls close to 70% of the global market share.”

Huhtamaki is a Finnish packaging firm that manufactures disposable tableware, flexible packaging and labels for food and drink, pet food, pharmaceuticals, household and hygiene brands.

Headquartered in Australia, Amcor manufactures flexible and film packaging, rigid containers, and speciality carton closures to cater to food, beverage, pharmaceutical, medical device, home, and personal care segments.

Amcor operates through 195 sites across more than 40 countries.