Questions of who is the best owner for a given business lie at the heart of M&A. Luckily for dealmakers, the answers change all the time.
Lately we've seen this timeless story play out in food packaging. A couple of recent megadeals in two different sectors have led to divestitures of packaging business. With them have come opportunities for a couple of smaller specialists in the field, both of which have been in business -- and therefore changing and adapting -- for more than a century.
One is Bemis Co. (NYSE:BEMIS) of Neenah, Wis., which on Monday announced it is buying the Food Americas operations of Alcan Packaging from Rio Tinto plc for $1.2 billion. For Rio the deal is a step on the path to paying down debt (and focusing on a core business, albeit a broad one) after the
mining giant bought Canadian aluminum company Alcan in 2007 for $38 billion. A sale of non-U.S. packaging assets
may come soon.
For Bemis, founded in 1858 and with 2008 sales of $3.8 billion, the transaction is more like the chance of a lifetime. The 23 Alcan facilities in the Americas and New Zealand will enable the company to
boost its net sales by 40% while retaining an investment-grade credit rating, according to a release. As
CEO Henry Theisen told Dow Jones, he loves the food biz because it's resilient and because manufacturers of store brands want to upgrade their packaging. In June,
Bemis bought the Latin American packaging operations of Finland's Huhtamaki Oyj for $42.7 million, according to The Deal Pipeline (subscription required).
On July 1 the packaging purchaser was Broomfield, Colo.-based Ball Corp. (NYSE:BLL), which bought a quartet of beverage packaging plants from Anheuser-Busch InBev for $577 million. The Anheuser-Busch plants had been marked for sale ever since InBev bought A-B for $52 billion a year ago.
Ball, which dates back to 1880, l
oves the beverage can business, according to CEO R. David Hoover. It's also in aerospace and food packaging, though judging from its
strategy statement it may be doing less well in food. Whereas Ball wants to grow in beverage cans and aerospace, it merely says it's aiming to improve its performance in food and household products packaging.
If Hoover or a successor should decide to change the business mix, dealmakers will surely be available to help. -
Kenneth Klee
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Juergen Lasowski
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