Metal packaging firm ORG Technology has agreed to acquire Ball’s metal beverage packaging facilities in China in a deal valued at around $225m.
Image: ORG Technology to acquire Ball’s metal beverage packaging facilities in China. Photo: courtesy of Graphics Mouse / FreeDigitalPhotos.net.
The deal is comprised of cash and potential additional payments between $50m and $75m for the relocation of an existing facility in the coming years.
Ball is planning to use proceeds from the deal to support its current global growth initiatives and multi-year share repurchase program.
Under the deal, ORG Technology will acquire beverage can and end plants in Beijing, Foshan, Hubei and Qingdao, as well as associated contracts and other related assets.
Furthermore, ORG will also secure license for Ball’s beverage can and end technology in China.
Ball also intends to reinvest around $50m from the relocation proceeds in ORG’s shares to expand commercial opportunities and better serve mutual customers in China and other markets.
Ball will continue to offer aluminum beverage packaging solutions to its customers in other regions of Asia, via its wholly owned Myanmar facility and joint ventures in Vietnam, Thailand, South Korea and Taiwan.
Goldman Sachs has acted as financial advisor to Ball, while Skadden, Arps, Slate, Meagher & Flom as legal counsel to the company.
Subject to customary regulatory approvals, the deal is expected to be completed in the second half of next year.
Ball chairman, president and CEO John Hayes said: “This arrangement allows each party to leverage its own geographic strengths, while allowing Ball to continue our disciplined approach to capital allocation by freeing up capital that does not generate our required returns.”
In October this year, Ball announced plans to shut down production at its beverage packaging plant in San Martino, Italy, by the end of this year.
The beverage packaging plant, which was opened in 1981, employs about 70 people.
Ball offers sustainable packaging solutions to the customers in the beverage, personal care and household product segments. It also provides aerospace and other technologies, as well as services primarily for the US government.
With around 17,500 employees, Ball and its subsidiaries generated net sales of $11bn in fiscal 2017.