(Originally published at WhatTheyThink.com for Premium Access Members on April 13, 2006) -- In the ink industry, 2005 might well be termed the year of merger. Flint Ink Corporation merged with XSYS Printing Solutions under the auspices of CVC Capital Partners to form the Flint Group; the Huber Group acquired a majority share in Micro Inks; and Siegwerk acquired the packaging business of SICPA and combined it with an earlier acquisition, Color Converting Industries, to form Siegwerk Ink Packaging. All were of significant size and scope, but even more notably, they reflected the increasing globalization of the ink industry as companies scrambled to find partners to secure their survival in an extremely challenging industry plagued by overcapacity and skyrocketing raw material costs.

Mergers reflected the increasing globalization of the ink industry as companies scrambled to find partners to secure their survival in an extremely challenging industry plagued by overcapacity and skyrocketing raw material costs.

Since acquisition is the only route to market share in a mature industry such as ink, on the surface it might appear that these acquisitions were merely aggressive moves on the part of European ink manufacturers to buy into the North American market. Certainly that was a factor, since North America still represents a considerable share of the world market, and its growth—despite continuing challenges—is better than that in Europe. However, there were other factors behind each merger/acquisition, and they are telling in terms of the way the geography of the ink industry is rearranging itself these days.