Rexam has finally sold its troublesome personal care plastic packaging business for $709m (£452m), which is at the top end of City forecasts. Patient shareholders will get their reward, too, by way of a £370m payout later this year.
In a hugely significant deal, private equity firm Sun Capital will pay $459m in cash for Rexam’s cosmetics, toiletries and household care business, and US firm Silgan has offered $250m for the high barrier food packaging unit. The higher-margin healthcare division, worth about 10 per cent of group sales, stays. Management can now focus on the core drinks cans business and hitting that target for return on capital employed of 15 per cent by the end of 2013. That should be easy, given this sale leaves it with little more than half a per cent to find and with new contracts in North America kicking in next year. Significant potential to increase volumes in popular speciality cans and grow share in emerging markets, especially the Middle East, Africa and India, is exciting, too.
