LONDON — Rexam plc has thrown its hat into the ring as a potential bidder for Schmalbach-Lubeca AG. Rolf Borgesson, Rexam chief executive officer, confirmed Rexam is interested in Ratingen, Germany-based Schmalbach. Though he was the first to declare interest in buying the packaging giant, industry analysts expect other competitors to jump on the bandwagon.
Viag AG, a major Schmalbach shareholder, is merging with Veba AG of Dusseldorf, Germany. Viag announced in September that it would sell or spin off Schmalbach.
Borgesson said Schmalbach's PET bottle, closure and can operations would fit comfortably with Rexam's beverage packaging division, formerly PLM AB of Malmo, Sweden. Rexam bought PLM last year.
A deal with Schmalbach also would give Rexam added weight in its plan to become a world leader in consumer packaging, he said.
But Borgesson added that London-based Rexam would not bid for Viag's glass packaging business, Dusseldorf-based Gerresheimer Glas AG.
Analysts expect Viag to sell Schmalbach within six months, and they anticipate bidders from both in and outside the industry. Analysts expect the business to attract a price of about 1 billion ($1.57 billion).
Daniel Cane, a London-based packaging analyst with ABN Amro, said he expects other bidders to include Crown Cork & Seal Co. Inc., American National Can Co. and Amcor Ltd.
Rexam will take the opportunity "to look at [Schmalbach's] books," Cane said. While the fit with the PLM operations would be good, Cane also predicts Borgesson would walk away from a deal if the price were not right.
Meanwhile, Rexam announced it is "at an advanced stage" in the disposal of two nonconsumer packaging businesses: its bulk packaging and printing divisions. After that, the company still plans to sell its coated films and papers division.
Schmalbach-Lubeca this month announced 1999 sales were slightly more than 4 billion deutsche marks ($1.9 billion). Its holdings include Schmalbach-Lubeca Plastic Containers U.S.A. Inc., the Manchester, Mich.-based firm that ranked as North America's fourth-largest blow molder.
Rexam Beverage Packaging employs 5,000 at 14 manufacturing plants in 10 European countries. It has sales of about 700 million ($1 billion).