Rexam to sell its glass business for £449 million

Manufacturing News, Source : TheManufacturer.com
Published : 12 Mar 2007 9:01
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Rexam, the global consumer packaging company, is to divest its entire glass business and concentrate resources on higher growth and emerging markets.

Global consumer packaging company and world’s largest can maker, Rexam, has announced that it has reached agreement with Ardagh Glass Group to divest its entire glass business for a cash consideration of €660 million (£449 million). The transaction is conditional on competition authority approvals in Germany and Poland.

The sale follows a review of the position of the glass business within Rexam's consumer packaging portfolio and is part of the company’s strategy to focus investment on organic growth and acquisitions in higher growth and emerging markets. In the short term the proceeds will be used to reduce borrowings.

In 2006, Rexam Glass, which employs 3,600 people and focuses on the north European market, reported sales of £437 million and operating profit of £40 million before allocation of central costs amounting to £4 million.

Commenting on the sale, Leslie Van de Walle, Rexam's CEO, said: "Rexam Glass is a strong, well run operation and will fit well with Ardagh, a dedicated player in glass. Rexam's strategy remains to focus on profitable growth in its core beverage can and plastic packaging businesses. We have a strong track record of achieving high rates of return on our investments and the proceeds from this sale provide the financial flexibility to generate attractive long term returns for our shareholders."

 

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