Alcoa to sell packaging business for US$2.7bln

Alcoa plans to hive off its packaging and consumer businesses to New Zealand´s Rank Group Ltd. for US$2.7 bln in a cash deal. The transaction is expected to be completed by the end of Q1-08. Lehman Brothers acted as financial advisor to Alcoa on this transaction. Alcoa´s packaging and consumer businesses generated revenues of approx US$3.2 bln and US$95 mln in after-tax operating income in 2006, representing approx 10% of Alcoa 2006 revenues and 3% of after-tax operating income. Businesses included in the sale are: Closure Systems International, a global leader in the manufacture of plastic and aluminum packaging closures and capping equipment for beverage, food and personal care customers; Consumer Products, a leading manufacturer of Reynolds Wrap branded and private label foil, wraps and bags; Flexible Packaging, manufacturers of laminated, printed, and extruded non-rigid packaging materials such as pouch, blister packaging, unitizing films, high quality shrink labels and foil lidding for the pharmaceutical, food & beverage, tobacco and industrial markets; and Reynolds Food Packaging, makers of stock and custom products for the foodservice, supermarket, food processor and agricultural markets including foil, film, and both plastic and foil food containers. These packaging businesses have approximately 10,000 employees in 22 countries. Alcoa will continue to operate its flat-rolled can sheet products serving the packaging market. Rank Group is a New Zealand-based privately-held company with a significant packaging presence, including: Carter Holt Harvey, SIG Holding, and Evergreen Packaging. Rank Group has operations in North America, Australasia, Europe, Asia, South America and the Middle East and employs approximately 17,000 people.
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