Rexam Divests European Food and Beverage Plastics Businesses

Rexam has announced that it has divested its Food Plastics operations in Yate in the UK, Lidköping in Sweden and Stilling in Denmark, for a total consideration of £25m including debt assumed. The businesses had combined sales of £67m in 2005 and net assets of £27m, including capitalised goodwill. The proceeds will be used to pay down borrowings.

Going forward, Rexam will focus its Food Plastics operation on developing a global business in the higher margin, faster growing market for high-barrier containers. Rexam has pioneered this type of product in the US and has more than half of the US market for them. Rexam's operation at Deeside in the UK will be developed to service European customers' growing demand for these containers.

Rexam also announces that it has started the process to sell its refillable PET bottle operation, Rexam Petainer, which is based in Sweden and the Czech Republic. It is a regional business focused on the Scandinavian and German markets. It has a minor position in the overall plastic bottle market and the company believes that it would be better to focus resources on segments that more closely fit its global strategy. In 2005, the business delivered sales of £34m.

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