Oh Ebashi, Ashurst and Clifford Chance have advised on a significant stake acquisition in the print manufacturing sector as Tokyo-based global paper manufacturer Rengo acquires a 29.9% stake in Hong Kong-based Asia Packaging.

The move is in line with the Japanese company’s expansion ambitions as it looks to tap high growth Asian markets overseas. This deal echoes its earlier move to increase capital in two affiliated companies in February this year – Zhongshan Ren Hing Paper Manufacturing Co and Zhongshan Rengo Hung Hing Paper Manufacturing Co – both based in China. Post-transaction, Rengo holds a majority equity stake in both companies, as they turned subsidiaries of the company as a result of the deal. 

“It is a significant stake of a listed company. This is a significant transaction as it is the first time a Japanese company is acquiring a stake in a Hong Kong-listed company,” Ashurst lead partner Robert Ogilvy Watson told ALB.  “This is consistent with the trend of Japanese companies making outbound investments into the greater Asian region, due to the limited opportunities available domestically. This deal also represents a combined desire of getting exposure in the high growth Asian markets and points to the strength of the yen that has put Japanese companies in good stead for M&A activity.”

Ashurst won the mandate through its long-standing relationship with Nomura, which acted as the corporate finance advisers for this deal.

Corporate finance partner Andrew Whan led the Clifford Chance team advising the seller; whilst Shiro Kuniya led the team of Oh Ebashi, the Japanese counsels on the acquirer’s side.

Asia Packaging is a listed company backed by CVC Asia Pacific, which currently holds approximately 37.5% of the issued share capital.

Hung Hing, is a manufacturer of packaging products, specializing in printed paper packageing, folding cartons and corrugated containers. The company which listed on the Hong Kong Stock Exchange in 1992, employs over 17,000 people in five plants in the People’s Republic of China.

Rengo is a leading Japanese paper and packaging materials manufacturer, headquartered and listed on the Tokyo Stock Exchange. The company has six core business operations which are paperboard, corrugated packaging, folding cartons, flexible packaging and heavy duty packaging. The company has 85 subsidiaries and 26 associated companies, with 32 factories throughout the PRC and Southeast Asia.ALB

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