Alcoa has said it has reached an agreement to sell its polyethylene terephthalate (PET) packaging business in South America to Amcor PET Packaging.
The company said that the purchase price will be $75 million (€63.9m), and that the transaction is expected to close in the third quarter of 2003.
The sale is part of Alcoa's previously announced (January 2003) divestiture programme to sell certain non-core businesses. Proceeds from the sale will be used to pay down debt. Presently Alcoa is one of the largest PET container producers in Latin America, with sales of $130 million and nine production facilities located across Brazil, Argentina, Colombia, Peru, Uruguay and Chile. These are the only PET bottle assets in Alcoa's global packaging business, which the company says will continue to be one of its key markets.
Alcoa added that it will continue to serve customers in the packaging and beverage industry throughout Latin America through its other packaging businesses, including closures. Following the sale, Alcoa will continue to have more than 10 facilities in Latin America serving packaging and beverage customers in Brazil, Chile, Peru, Colombia, and Argentina.
The move comes following a disappointing set of fourth quarter results were revealed at the beginning of this year. The company said that losses for that quarter of $223 were attributable because manufacturing weakness had continued in a global scale for longer than expected. At the time the company forewarned that divestments would take place in the course of the coming months.
In addition to its PET activities, Alcoa is currently the world's leading producer of primary aluminum, fabricated aluminum and alumina, and is active in all major aspects of the industry. The company has 127,000 employees in 40 countries.
Amcor is a leading global packaging company with annual sales of over $7.2 billion (€6.1 billion.) The company is based in Australia and has operations throughout Australasia, Asia, Europe and the Americas. Amcor offers a broad range of plastic, metal, fiber and glass packaging, with special focus on PET containers, flexible packaging, and metal and plastic closures for the food and beverages industries.