Pechiney SA has rejected a takeover bid by packaging rival Alcan Inc. that would have created an aluminum and flexible packaging giant.
Directors of Pechiney said July 8 that a proposal by Montreal-based Alcan was contrary to company interests and was clearly inadequate in reflecting Pechiney's value. Alcan had made an unsolicited, US$3.91 billion bid for Paris-based Pechiney.
Pechiney's Chicago-based plastics packaging operation would have been included in the sale. The U.S. group, Pechiney Plastic Packaging Inc., recorded more than $700 million in North American sales for its film operations last year and has about 3,500 employees. Pechiney recorded close to $1 billion in worldwide plastics packaging sales.
A second bid from Alcan is possible but much uncertainty remains, said analyst Ghansham Panjabi of New York-based Lehman Bros. Alcan primarily has interest in Pechiney's large aluminum holdings, and a merger would create the world's largest aluminum producer in sales, according to published reports.
The combined entity would have annual sales of $23.9 billion.
According to several published reports, Alcan is considering a second bid for Pechiney that might be better accepted by the French company. Other reports suggested that Alcan rushed the first offer after top executives of both companies met over the July 4 weekend to discuss a friendly takeover.
If the Alcan deal were to go through, the firm could spin off or sell Pechiney's plastics business to focus on its core aluminum assets, Panjabi said. For several years, Pechiney has attempted to expand its plastics operations, a move Alcan also might consider, he said.
Alcan attempted to buy Pechiney four years ago as part of a three-way, friendly merger with Switzerland-based Algroup Ltd. After the European Union blocked the Pechiney purchase, Alcan bought Algroup for $4.7 billion.