Amcor, the Australian packaging company, halted trading on its shares today as it awaits a final deal for the acquisition of Rio Tinto’s packaging unit. According to Reuters, Amcor will pay a total of A$2.4 billion for the unit with A$1.6 billion from issuing equity and A$800 million in debt. The deal will make Amcor a dominant player in Europe in the flexible food and tobacco packaging industry. RBS reported the acquisition will be a positive for Amcor’s shares. Rio Tinto, which is struggling to pay down its debt burden, will be assisted in doing so through the deal. Two years ago, Rio bought Alcan’s aluminum business and planned $15 billion of asset sales. However, the economic crisis made it difficult for Rio to achieve acceptable prices on its assets. According to Steven Robinson, senior investment manager at Alleron Investment Management, Alcan’s packaging units are not part of Rio’s long-term strategy.
Amcor Near Closing Deal with Rio Tinto
Amcor purchase of Rio Tinto’s packaging unit will make a dominant player in the industry.
August 17, 2009