A US District Court approved an injunction to block the 260m ($420m) deal (PrintWeek, 17 April).

Finnish paper manufacturer UPM-Kymmene, which owns Raflatac, had been given approval by the European Commission last year for the purchase of 320m-turnover MACtac from Bemis Company.

Raflatac Group president Pentti Kallio said he was surprised and disappointed by the decision to block the deal. He said the company would now look elsewhere for acquisition opportunities.

UPM-Kymmene has decided not to appeal against the decision, having already recorded 29m in costs relating to the deal in the first half of this year.

The US Department of Justice announced its intention to block the deal in April, saying it planned to investigate competitive practices in the labelstock sector.

Rival label producer Avery Dennison said that although it had taken no position on the proposed acquisition, it had noted that the court in giving its decision had said the label paper industry was highly competitive.

That is consistent with our view, said a spokesman for Avery Dennison.

Meanwhile, Avery Dennison has agreed to sell its package label converting business in Europe to CCL Industries in a deal said to be worth around 37m.

The deal involves the sale of plants at Brondby and Randers in Denmark, and at Chilly-Mazarin in France.

All 325 Avery Dennison staff across the three sites will transfer to CCL Industries, which bought some of the former Jarvis Porter label interests last year.