Bemis Co. Exploring Purchase from Rio Tinto Alcan
Bemis of Neenah, Wis., is the second company to publicly acknowledge 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.
14/05/09 Bemis Co. Inc. is exploring the possibility of buying a portion of Rio Tinto Alcan packaging.
Bemis stated in its first quarter results news release that it is conducting due diligence on a portion of the packaging business of Rio Tinto Alcan. Bemis spokeswoman Melanie Miller said she could not comment beyond a statement in the Bemis’ news release.
A new accounting standard requires the company to expense the costs of a possible business combination when the expenses are incurred. Major expenses are accounting, legal and other professional fees associated with Bemis doing due diligence on a portion of Rio Tinto’s packaging business, the news release indicated. Bemis incurred a 6 cents-per-share charge to cover the 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 news release stated. “No further details will be made available at this time.”
Rio Tinto Alcan spokesman Stefano Bertolli said in a telephone interview from Montreal that “we are in discussions with a number of parties. We have no details at this time.”
Bemis of Neenah, Wis., is the second company to publicly acknowledge 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 relevant business and Bemis’ financing plans.
Bemis is the largest film and sheet extruder in North America with 2007 sales of $2.1 billion. Its first quarter sales were $843.4 million, an 11 percent decrease from a year earlier. The decline was due mainly to currency effects but lower unit volumes also contributed to the drop. Net income of $36.7 million was 13 percent lower than a year earlier.
Alcan Packaging makes flexible packaging, including plastic types, for food and beverage, medical and pharmaceutical, cosmetics and tobacco markets. It had sales of $6.2 billion in 2007.
