Jul 8 2009
Rio Tinto has signed an agreement to sell its Alcan Packaging Food Americas division to Bemis Company, Inc for a total consideration of US$1.2 billion of which US$ 200 million may be in the form of shares in Bemis Company, Inc. Completion of the transaction remains subject to customary closing conditions, including regulatory approvals.
"The sale of the Food Americas division is the first significant step in reducing the asset portfolio acquired with Alcan," said Guy Elliott, chief financial officer, Rio Tinto. "The transaction represents solid value given the challenging financial environment. We believe this is a positive outcome for Food Americas as it is a good fit with Bemis's business and stands to benefit from an excellent platform for growth and development in the regional food sectors in the Americas."
The Food Americas division, which is headquartered in Chicago, has approximately 4,600 employees at 23 locations in the US, Canada, Mexico, Brazil, Argentina and New Zealand. Alcan Packaging Food Americas generated revenues of US$1.5billion in 2008, accounting for 23 per cent of Alcan Packaging's total revenues.
During 2009, the Group has announced a total of US$3.7billion of divestments. Those already announced are its interest in the Ningxia aluminium smelter in China for US$125 million, its potash assets and Brazilian iron ore operations for US$1.6 billion and its Jacobs Ranch coal mine in the United States for US$761 million. The divestment programme continues for other assets identified for sale, including the remainder of Alcan Packaging and Alcan Engineered Products.
Following this sale, as part of the 2009 half-year reporting process, the Group will review the carrying value of the remaining Alcan Packaging business, which are expected to remain classified as assets held for sale in the Group's interim financial statements. The Group's current expectation is that this review may result in some downward revision, the extent of which will be determined and announced in conjunction with the Group's 2009 half-year results announcement.