Dropping PET in South America
9 Jun 2003
Alcoa has reached an agreement to sell its polyethylene terephthalate (PET) packaging business in South America to Amcor PET Packaging.
The purchase price for the nine Alcoa operations is $75 million, and the transaction is expected to close in the third quarter of 2003.
The sale is part of Alcoa's previously announced divestiture program to sell certain non-core businesses. Proceeds from the sale will be used to pay down debt.
Alcoa is one of the largest PET container producer in Latin America, behind Amcor, with sales of $130 million. Its nine production facilities are located across Brazil, Argentina, Colombia, Peru, Uruguay and Chile.
Amcor said in a statement that it would relocate Alcoa's assets and employees to existing Amcor PET operations in cases where Amcor's current 13 PET container plants were 'co-located' with the nine Alcoa plants. Synergy benefits from plant closures and improved operating efficiencies are expected to be in excess of $5 million per annum after three years.
