Acquisition-hungry Rexam could buy Owens-Illinois plastics arm

David McCormack, packagingnews.co.uk, 08 June 2007

 

Rexam has confirmed that it is in talks with US packaging company Owens-Illinois (OI) about a possible £750m ($1.5bn) acquisition of OI's plastic division.

 

The Wall Street Journal said a deal may close as soon as Monday 11 June, although there are unresolved issues between the companies.

 

Responding to the report, Rexam issued a statement that said: “An acquisition, if agreed, would only occur on conditions that meet Rexam’s investment returns criteria and is likely to be funded from a combination of its glass disposal proceeds, debt and an element of equity.”

 

In January, OI hired Goldman Sachs to review strategic options for its plastics packaging operations, including a possible sale.

 

The division, which makes plastic drugs containers and other healthcare packaging, had sales of £388m ($772m) in 2006. It has plants in the US, Mexico, Brazil, Hungary, Singapore and Malaysia.

 

Rexam, the world’s largest drinks cans maker, has been growing its rigid plastic packaging business through acquisitions in recent years.

 

It purchased two US plastics packaging companies, Precise Technology and Delta Plastics, in 2005, and last year it bought Dutch pump maker Airspray and Chinese company FangXin.

 

Rexam’s plastic packaging arm had sales of £360m in 2006, up from £236m the previous year.