US packaging giant Owens-Illinois is to sell its plastics packaging business to UK-based Rexam for approximately $1.825bn in cash. For the twelve months ended December 31, 2006, Owens-Illinois Plastics had revenues of approximately $760m.
The transaction, which has been approved by the board of directors of both Rexam and Owens-Illinois, is expected to close early in the third quarter, subject to regulatory approvals and Rexam shareholder approval.
Owens-Illinois intends to use the majority of the sale proceeds to reduce senior secured debt maturing in 2009, 2011 and 2012.
'This sale and the subsequent debt reduction will give us greater operating flexibility and allow us to better focus resources to improve our core glass business,' said Al Stroucken, Owens-Illinois chairman and chief executive officer.
Owens-Illinois Plastics itself is comprised of HealthCare Packaging and Closure & Specialty Products. The company has approximately 2,800 employees in 19 plants in the US (including Puerto Rico), Mexico, Brazil, Hungary, Singapore and Malaysia with a headquarters and technical development centre in Perrysburg, Ohio.
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