Alcan to buy VAW Packaging
22 Nov 2002
Alcan today announced that it has reached a non-binding agreement in principle with Norsk Hydro to purchase VAW Packaging (FlexPac) for approximately 345 million Euros.
According to a statement, the proposed acquisition will significantly enhance Alcan's global position in packaging, expanding its footprint technologically and regionally, particularly in the developing markets of Asia.
FlexPac, which includes 14 plants in 8 countries and 5,400 employees, posted consolidated sales of 637 million Euros in 2001. Based upon projected earnings for 2002, the purchase price represents a multiple of about 6.9 times EBITDA (earnings before interest, taxes, depreciation and amortisation).
FlexPac is said to comprise a set of custom manufacturing businesses producing high-quality flexible packaging products for a wide variety of end-use customers and manufacturers' of consumer goods, including those in the food, dairy and pharmaceutical industries.
FlexPac has in recent years been expanding its activities in developing markets, including Turkey and China where operations were added to the portfolio in mid 2001. This would allow Alcan to participate more effectively in Eastern Europe and Asia. Conversely, in becoming part of Alcan's leading packaging group, FlexPac would have better stability and strategic direction.
The proposed transaction is expected to be completed in mid-2003 subject to the necessary regulatory approvals.
