LONDON — Packaging group Rexam plc is on the acquisition trail again with a £380 million ($634 million) cash bid to take over Swedish bottle manufacturer PLM AB.
The offer for PLM of Malmo, Sweden, a leading European consumer packaging company, already has attracted the consent of PLM's largest shareholder, Industrivarden AB. London-based Rexam said Industrivarden has agreed to sell its 23 percent stake to Rexam for 1.18 billion Swedish kronor ($146 million).
But PLM has advised shareholders to take no action until it has considered the offer fully.
Besides making PET and glass bottles, PLM is one of Europe's largest drink can manufacturers.
Meanwhile, Rexam is close to disposing of its industrial packaging division, which it said could raise $400 million, funds the group plans to use toward its PLM purchase.
Rexam is following a strategy of expanding its international packaging and coated films and papers businesses. A successful acquisition will create ``a significant force'' in global packaging, with sales of about $3 billion, the company said.
The British group enjoys an inside advantage in bidding for PLM since its chief executive officer, Rolf Borjesson, was once CEO of the Swedish packaging group. A successful deal would boost Rexam's European base and create one of the world's top 10 consumer packaging groups, it said.
``I am well aware of [PLM's] strengths and potential. This acquisition would strengthen our customer base and broaden the range of products and technologies which we can offer customers,'' Borjesson said.
He added that the merged company would have ``a balanced spread of sales'' across the United Kingdom, continental Europe and the United States, and a European infrastructure that would speed up the expansion of its packaging business.
At the end of last year, PLM employed 6,000 at sites across Europe, including in Sweden, Norway, Denmark, Poland, Germany, the Netherlands, France, Britain, Austria and the Czech Republic. In November the firm launched a 52 percent-owned joint venture in Russia to make beverage cans.
PLM's plastics division produces PET beverage bottles and specialty food packaging. It is one of Europe's top two suppliers of refillable PET bottles, Rexam said.
While PLM as a whole reported a pretax profit of SKr575 million ($75.2 million) on annual sales of SKr8.8 billion ($1.15 billion) for 1997, the plastics division saw a SKr60 million ($7.85 million) operating profit on annual sales of SKr829 million ($108 million) for the same year.
Rexam said the deal will expand its customer base and raise its profile, particularly in the food and beverage sectors. It also will gain new technologies through PLM.
Rexam intends to coordinate certain of PLM's plastics food-packaging businesses with its own specialty food-packaging sector. The Swedish firm's beverage packaging units will be managed as Rexam's European beverage pack division, it said.
But analysts in London were unenthusiastic about the would-be deal, suggesting Rexam will pay over the odds for a firm in the relatively mature food and beverage packaging sector. They would prefer to see Rexam acquire in its higher-growth health-care, coated film and paper packaging areas, according to a story in London's Financial Times.