Rank Group Ltd., the privately held investment group that bought SIG Holding AG earlier this year, has added Alcoa Inc.'s packaging and consumer businesses to its operations.
Alcoa announced Dec. 22 it will sell the units to Rank for $2.7 billion in cash, closing out an eight-month bidding process for the businesses that generated $3.2 billion in sales in 2006. The companies expect to close the deal during the first quarter of 2008.
The businesses include Pittsburgh-based Alcoa's Closure Systems International, Consumer Products, Flexible Packaging and Reynolds Food Packaging business units, which take in plastic wrap and bags, thermoformed containers and extruded plastic sheet and film.
The units include 10,000 employees in 22 countries and generated $95 million in after-tax operating profit for Alcoa in 2006, the companies stated in a news release.
Alcoa has been selling its holdings and trimming operations throughout 2007, and with the sale of its packaging and consumer products groups will tighten its focus on core products and focusing on ``higher return opportunities,'' said spokesman Kevin Lowery in a Dec. 26 telephone interview.
For Alcoa, it made more sense to sell the packaging group, while the packaging businesses are expected to do better as part of Rank, which is focusing on building its global reach in packaging, Lowery said.
Rank, based in Auckland, New Zealand, is owned by Graeme Hart, who is ranked as New Zealand's richest man and steadily has been investing in packaging firms. It already had paperboard packaging through its Center Holt Harvey group of companies, with operations through Australia, New Zealand and Southeast Asia.
In December 2006, it added Evergreen Packaging, which brought it paperboard packaging and equipment in North America.
In May, it took over SIG, a packaging company based in Neuhausen am Rheinfall, Switzerland, buying 98 percent of the business for $2.3 billion.