Saturday December 22, 02:28 AM
Alcoa sells packaging business to N. Zealand firm
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NEW YORK (AFP) - US aluminum giant Alcoa (NYSE: AA - news) announced Friday it has agreed to sell its packaging and consumer operations to New Zealand's Rank Group Limited for 2.7 billion dollars in cash.
"The transaction is expected to be completed by the end of the first quarter 2008," Alcoa said in a statement.
Alcoa's packaging and consumer businesses represented about 10 percent of its revenues last year, raking in about 3.2 billion dollars, the company said. It also generated 95 million dollars in after-tax operating income.
The businesses being sold include Consumer Products, a manufacturer of the Reynolds Wrap aluminum and plastic foil brand.
The sale also includes Closure Systems International, which manufactures plastic and aluminum packaging closures and capping equipment for foods, drinks and personal care products.
Alcoa is also selling Flexible Packaging, which manufactures packaging materials for the pharmaceutical, food and beverage, tobacco and industrial markets; and Reynolds Food Packaging, makers of stock and custom products for supermarkets, and the food service, food processor and agricultural industries.
The packaging businesses being ceded by Alcoa to Rank Group (LSE: GB00B1L5QH97.L - news) employ about 10,000 people in 22 countries.
Alcoa had said in October that, following a "strategic review," it was preparing to sell its packaging and consumer operations as part of a wide-ranging reorganization.
The US metals giant said then that it had "received strong indications from strategic buyers" for the packaging and consumer businesses.
The October announcement came weeks after Alcoa announced it was selling its stake in Aluminum Corporation of China Limited (Chalco).
Rank is owned by reclusive billionaire Graeme Hart, 52, New Zealand's richest man. Hart has a personal fortune estimated by local media at 2.7 billion New Zealand dollars (2.05 billion US).
Hart, who left school at 16, worked variously as a tow-truck driver and panel beater before branching into business, primarily buying and turning around under-performing companies.
In recent years he has focused on the paper packing sector, turning Rank Group into the world's second biggest operator in the paper products field.
Acquisitions in the past year include Blue Ridge Paper Products Inc in North Carolina, and Swiss company SIG Holding AG -- which ranks second only to a Swedish company, Tetra Laval, in the global beverage carton market.
Hart likes to stay out of the public limelight, but in a rare interview he has talked of a lack of interest in making money for its own sake, and described his wealth as a "by-product" of what he does.
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