Rexam PLC, the global consumer packaging company, announces that it has agreed to sell its beverage and speciality closures business (“Closures”) to Berry Plastics for $360m in cash, subject to certain asset adjustments. Completion is expected in Q3 2011 and is conditional on regulatory approvals.The Closures business employs about 1,500 people and is focused on the North American market. In 2010, the business was reported as discontinued with sales of £343m and underlying operating profit of £22m (loss before tax of £177m including exceptional and other items). As at 31 December 2010 it had gross assets of £280m and liabilities of £50m.
Rexam plans to right-size its Plastic Packaging operations as a result of this transaction. This is expected to give rise to an exceptional charge of around £25m, of which £15m will be cash costs.
The net proceeds will be used to reduce net debt. Over the past two years the Company has bought back some €62m of its €700m 2013 medium term notes and may continue to make further repurchases of these notes and other senior bonds going forward.
