Owens-Illinois Signs Definitive Agreement To Sell Blow-Molded Plastic Container Assets To Graham Packaging Company
Total consideration for the sale will be approximately $1.2 billion to be paid in cash at closing. The transaction is expected to close in the fourth quarter, subject to regulatory approvals. The proceeds from the sale will be used to pay down debt.
"This is another critical step forward in the transformation of Owens- Illinois into a modern, vibrant global growth enterprise," said Steve McCracken, Owens-Illinois Chairman and CEO. "We will now be able to deleverage ourselves in the short term, and be better able to focus our resources on the core businesses, technologies and channels that represent our long term future."
Included in the sale are 24 plastics manufacturing plants in the U.S., two in Mexico, three in Europe and two in South America, serving consumer products companies in the food, beverage, household, chemical and personal care industries. Net sales for the businesses being sold were approximately $1.1 billion in 2003. Owens-Illinois is advised in this transaction by Deutsche Bank.
"We recognize the talent and expertise of Owens-Illinois employees as industry leaders," said Philip R. Yates, Chairman and CEO of Graham Packaging Company. "The O-I operations will be an excellent strategic fit with our existing 57 plants throughout North America, Europe, and Latin America which are solely focused on customized blow-molded plastic containers."
O-I announced on June 21 it had completed the acquisition of BSN Glasspack, S.A., for approximately US$1.4 billion, adding 18 glass container manufacturing plants and nearly doubling the Company's European presence.
"We have now become truly global in glass with important leveraging capabilities in scale and scope, while maintaining an important and differentiated presence in the complimentary plastic arenas of closures and health care packaging," said McCracken. "This sale, while representing a difficult choice for us, marks a crucial shift in the portfolio and strategy of O-I. Our redefined market presence, combined with differentiated technology sets, should serve our target markets and investment communities well in the years ahead."
As previously announced, the Company has implemented several liquidity improvement initiatives to reduce debt, improve cash flow and increase investor value. O-I also announced in June that ACI Packaging, a subsidiary of the Company, sold a substantive part of its plastics packaging business in Australia and New Zealand to Visy Industrial Plastics, a wholly-owned subsidiary of Visy Industrial Packaging.
Source: Owens-Illinois