Owens-Illinois, Inc., has entered into a definitive agreement with Rexam PLC to sell its plastics packaging business, the US container glass giant said 11 June 2007.
Total consideration for the busin…
Owens-Illinois, Inc., has entered into a definitive agreement with Rexam PLC to sell its plastics packaging business, the US container glass giant said 11 June 2007. Total consideration for the business (including tax basis step-up) will be approximately USD 1.825 billion, to be paid in cash at closing. For the twelve months ended 31 December 2006, O-I Plastics had revenues of approximately USD 760 million. The transaction, which has been approved by the boards of directors of both Rexam and O-I, is expected to close early in the 3Q 2007, subject to regulatory approvals and Rexam shareholder approval. O-I intends to use the majority of the sale proceeds to reduce senior secured debt maturing in 2009, 2011 and 2012. As a result of existing tax loss carryforwards, O-I expects to have only minimal federal cash tax liability from the sale transaction. “I am pleased with the outcome of our strategic review process and am extremely confident that O-I“s Plastics business will be in very good hands”, said Al Stroucken, O-I chairman and chief executive officer. “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”.