Reuters is reporting that flexible packaging major Novolex could buy Newell Brands Inc.'s Waddington Group, a maker of disposable food packaging for markets such as bakeries, delis and restaurants.
The sale would mark the first move by the consumer products giant, which has said it is looking to sell a number of businesses.
In a May 2 story, Reuters, citing three unidentified sources, said Novolex, based in Hartsville, N.C., was the high bidder in an auction for Waddington, based in Covington, Ky. Reuters is saying the price would be more than $2 billion.
Novolex is owned by investment firm Carlyle Group.
Waddington was purchased by Jarden Corp. for $1.35 billion in mid-2015. The following year, Newell bought Jarden to create a massive $16 billion company. But the mega deal has run into some problems, and Newell Brands announced Jan. 25 that it was looking to sell several companies to cut its global factory and warehouse space, as well as its customer base, by 50 percent. The company's stock price has plunged since the merger.
Newell named Waddington on its for-sale list — along with housewares giant Rubbermaid. Other business for sale are Process Solutions, Mapa, Rawlings and U.S. Playing Cards. If the deal happens with Novolex, it would mark the first divestiture since the January announcement.
Newell Brands, traded on the New York Stock Exchange, has been the center of controversy recently, much of it fueled by a feud between management and Martin Franklin, who co-founded Jarden and guided its sale to Newell. Franklin was a board member for Newell who became a harsh critic of management. In January, he and two other former Jarden executives resigned from the Newell board.
Franklin then joined with hedge fund Starboard Value LP to launch a proxy fight against Newell for full control of the board. But Franklin dropped out of the fight after Carl Icahn, who had taken a stake in the company, made a deal with Newell in March to open the door to four of his preferred candidates for the board.
On April 23, Newell and Icahn agreed to include one board member from Starboard's slate, as well as two new independent board members.
"This agreement will enable the company to now focus exclusively on our transformation plans and our efforts to strengthen our financial and operational performance," said Newell CEO Michael Polk. "We have listened to and agreed with our shareholders' desire to see this campaign reach a constructive resolution."
Polk intends to see Newell Brands become a "simpler, stronger and faster" company, in part by selling portions of its holdings.