Global packaging manufacturer Scientex has signed a conditional share sale agreement (CSSA) with vendors for the proposed acquisition of a 42.41% controlling stake in flexible packaging firm Daibochi for MYR222.5m ($53.11m).

This deal follows the HOA agreement signed on 14 November and was executed within the two-month stipulated timeframe in the HOA. The vendors collectively hold 139.1 million ordinary shares in Daibochi.

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Following the fulfilment of conditions precedent of the CSSA, Scientex will also have to extend a mandatory takeover offer to purchase the remaining shares and warrants in Daibochi.

Scientex managing director Lim Peng Jin said: “In line with our mission to expand our footprint in the global flexible plastic packaging (FPP) market, this synergistic merger brings us one step closer in integrating two formidable regional giants into a well-resourced global player.”

This integration will enable the enlarged Scientex Group to provide a more comprehensive range of FPP solutions to support its clientele’s wide range of packaging requirements.

“This synergistic merger brings us one step closer in integrating two formidable regional giants into a well-resourced global player.”

Jin added: “We look forward to an accelerated pace of expansion going forward, as we tap into the enhanced technical knowledge and skilled talent pool of the enlarged Scientex Group, to target more growth opportunities especially in the high-growth regional markets.”

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The transaction is currently subject to various customary conditions, including approval from the shareholders and Bursa Malaysia Securities. It is expected to close during the second quarter of next year.

Following the completion of the transaction, Scientex will retain Daibochi’s management and employees.

Daibochi operates manufacturing facilities in Malaysia and Myanmar. It produces high-barrier, laminated flexible packaging for major companies in the food and beverage, fast-moving consumer goods (FMCG), and speciality industries.