Crown Holdings Announces Acquisition of Heineken Packaging Businesses in Mexico

01 Sep 2014 --- Crown Holdings, Inc., a global leader in consumer packaging, announced that it has entered into a definitive agreement to acquire EMPAQUE, a leading Mexican manufacturer of aluminum cans and ends, bottle caps and glass bottles for the beverage industry, from Heineken N.V., in a cash transaction valued at $1.225 billion, subject to adjustment.

The acquisition is subject to customary closing conditions, including competition authority approval, and is expected to close by year end 2014 and contribute between $0.15 and $0.20 per share to Crown’s 2015 earnings before synergies, but including estimated amortization and depreciation for purchase accounting adjustments. Information regarding the expected amount and timing of synergies will be provided in due course.

According to Crown Chairman and Chief Executive Officer John W. Conway, the acquisition of EMPAQUE will significantly enhance Crown’s strategic position in beverage cans, both regionally and globally. In North America, Crown will become the second largest beverage can producer, supplying over 24 billion units annually to a balanced portfolio of beer and soft drink customers. On a worldwide basis, after closing Crown will supply over 62 billion units annually, representing 20% of all beverage cans globally. Crown will also bolster its already industry-leading geographic footprint, as over 50% of beverage can revenue will be attributable to the faster growing developing regions. Long-term supply agreements with Heineken affiliates will also provide a stable cash-flow base for the EMPAQUE business in Mexico.

With projected 2014 sales of approximately $700 million and EBITDA of approximately $150 million, EMPAQUE, headquartered in Monterrey, Mexico, currently operates two beverage can plants, a plant that manufacturers beverage can ends, aluminum closures and bottle caps, a glass bottle plant and a glass service facility in Mexico, with a total of approximately 1,500 employees.

Commenting on the transaction, Conway said, “We are excited to acquire EMPAQUE and its excellent, well-managed facilities. This transaction will allow us to expand our presence in the growing Mexican market, significantly strengthen our global beverage packaging business and deliver compelling benefits to shareholders.”

Citigroup Global Markets Inc. acted as financial advisor to Crown and provided committed financing for the transaction.