Bemis Co. Inc. is exploring the possibility of buying a portion of Alcan Packaging from London-based Rio Tinto plc.
In announcing its first-quarter results, Bemis said it is conducting due diligence related to part of Rio Tinto's Alcan Packaging business, based in Montreal. Bemis spokeswoman Melanie Miller said she could not disclose more information.
A new accounting standard requires Bemis to record the costs of a possible business combination when expenses are incurred such as accounting and legal fees associated with doing due diligence on the Alcan business. Bemis incurred a 6 cent-per-share charge to cover those expenses.
These confidential efforts are ongoing and are consistent with Bemis' historical acquisition strategy of focusing on core competencies while retaining an investment-grade profile, the release said.
We are in discussions with a number of parties, Rio Tinto Alcan spokesman Stefano Bertolli said by telephone from the unit's Montreal headquarters.
Bemis of Neenah, Wis., is the second company to acknowledge publicly that it is interested in Rio Tinto Alcan's packaging business. Early this year, Amcor Ltd. of Melbourne, Australia, confirmed the two parties are in talks.
As a result of the due diligence, Standard & Poor's Ratings Services placed all its ratings on Bemis, including the A long-term and A-1 short-term ratings on CreditWatch, with negative implications. The ratings firm will resolve the CreditWatch when Bemis announces details about the business and financing plans.
Bemis' North American film and sheet extrusion sales in 2007 were $2.1 billion.