Rexam sells flexible packaging business

Rexam, the world's leading producer of beverage cans, has sold two flexible packaging plants in the UK to Australian group Amcor for A$30 million (€17.9 million).

The plants at Ledbury and Thetford had combined sales of €68 million in 2001.

Amcor said the two plants were an excellent strategic fit with its existing European business, Amcor Flexibles Europe (AFE). The Thetford plant specialises in high barrier vacuum metallising and coating technology, and the Australian group said it would give AFE a major presence in core markets such as fresh food, beverages and confectionery. The Ledbury plant, meanwhile, is a good fit with AFE's existing UK operations, which focus on fresh produce and bakery.

Meanwhile, Rexam has been linked to a possible bid for the US group Crown Cork & Seal, its principal rival in the beverage market. Crown Cork is struggling under a heavy debt burden, and analysts have suggested that it could be a takeover target.

However, it is precisely this heavy debt burden which makes it unlikely that Rexam will bid for the company, sources close to the company said. Furthermore, the similarity of the Rexam and Crown Cork businesses would make it all but impossible for Rexam to buy the US company without divesting a large part of it.

It is possible, however, that Rexam would bid for parts of Crown Cork if the business is forced to file for Chapter 11 bankruptcy, as they would be considerably cheaper to buy.

Rexam denied that it was intending to make a bid for Crown Cork, although it did admit that it would not rule out any future possibilities.