Global packaging company Amcor has entered into a definitive agreement to sell its 65% stake of Amcor White Cap LLC to Silgan Holdings, its 35% joint venture partner.
This joint venture consists of seven plants, six in the US and one in Mexico.
The price for the 65% equity holding is A$66 million, (US$37.1 million), which is equivalent to the book value. The joint venture has debt of approximately A$156 million, (US$88 million), which is consolidated on Amcor’s balance sheet.
Amcor will continue to develop its position in the plastic closures market in North America through its joint venture partner Bericap. Amcor will also retain 100% ownership of the European and Asian metal closures operations as well as small facilities in Brazil and Venezuela.
Amcor’s Managing Director, Russell Jones said: ‘Strategically it was important to resolve the position of the joint venture and move forward in North America with either 100% ownership of the closures operations or to sell out completely.’
‘The North American metal closures business is in the process of significant rationalisation and restructuring that will require substantial effort over the next two years. Through a shotgun sale arrangement, we offered a fair price that reflected the value of the business and the risks involved.’
The transaction is expected to be finalised by the beginning of April this year.