Amcor Offers to Acquire Alcan Packaging Global Pharmaceuticals
In a deal that could result in one of the largest packaging companies, Amcor has offered to acquire parts of Alcan Packaging for US$2025 million from Rio Tinto. The Alcan Packaging businesses that Amcor has agreed to acquire include Alcan Packaging Global Pharmaceuticals, Alcan Packaging Food Europe, Alcan Packaging Food Asia, and Alcan Packaging Global Tobacco.
Alcan Packaging Global Pharmaceuticals includes all the business units Alcan Packaging operates in Contract Packaging, Medical Flexibles, Pharma Flexibles, Plastics Americas, Glass Tubing, and Specialty Cartons. The process to divest the Beauty sector is ongoing, managed by RioTinto.
These divisions of Alcan Packaging would add approximately US$4.1 billion in sales and 14,000 employees across 80 plants in 28 countries to Amcor, which generated AU$9.53 billion in sales from operations in 34 countries. Before the deal, Amcor maintained 226 sites worldwide, with approximately 21,000 employees. The combined company would be one of the world’s leading packaging companies with a wide array of expertise, products, and services.
The acquisition would help Amcor grow its strategic business areas of flexible packaging and folding cartons packaging. “We believe that this acquisition will bring customers of both Amcor and Alcan Packaging even greater value through broader offerings and enhanced customer service," says Amcor's managing director and CEO Ken MacKenzie. "Critically, beyond the hard assets, the combined company will draw on the best people from both organizations to drive these improvements.”
Amcor credits its financially solid position to “The Way Forward”, Amcor’s get-fit program initiated in 2005. This program was intended to improve core competencies across a range of disciplines and to create a more focused portfolio of businesses. Improvements in capital discipline and cost controls have ensured that the company is in a good position to take advantage of acquisition opportunities, the company reports.
“Growing our businesses in a sustainable manner was always our stated intention, and we are pleased to have entered into this agreement. We are committed to becoming a leader in the global packaging industry,” adds MacKenzie. "This acquisition is a clear fit with our strategic growth plans, building greater shareholder value by expanding our business whilst obtaining the economies of scale that comes with an opportunity such as this.”
Rio Tinto recently announced the sale of the Alcan Packaging food Americas division to Bemis Company, Inc. for US$1.2 billion. “We have already agreed to asset sales of US$6.6 billion over the last 18 months, despite the challenging financial markets,” says Guy Elliott, CFO, Rio Tinto. “We believe Amcor’s offer is in the interests of all stakeholders. These businesses would be acquired by a leading player in the global packaging sector that is very well placed to enable ongoing success of the businesses.”
The acquisition is not expected to close for several months, pending regulatory approvals and consultation with European Works Councils. Until approval, both Amcor and Alcan Packaging will continue to operate as separately run companies.