Visy buys PET facilities

In Australia Coca-Cola Amatil is in advanced negotiations with Visy Industries on an A$140 million (€85m) deal to sell its PET plastic bottle manufacturing sites as part of a divestment of non-core assets.

The Australian drinks manufacturer said yesterday any agreement will include a long-term contract for Visy to supply blown PET bottles to Coca-Cola.

The deal would further expand the empire of packaging billionaire Richard Pratt, who was listed last week as Australia's third richest man with an estimated net worth of A$2.8 billion.

In late April, the company announced it had identified an initial A$200 million of non-core assets, including its PET manufacturing assets in Australia and New Zealand. These PET facilities employ about 250 people.

"Discussions are going on, and Visy are the lead player,"​ said CC-Amatil corporate affairs manager Alex Wagstaff. "The (sale) target is towards the end of June, early July."​

Wagstaff said the sale of facilities around Australia and in Auckland, New Zealand was purely commercial. "It's not an area of our core business - it's to do with capital management of the business, making sure we improve return on capital employed,"​ he said.

Coca-Cola has also agreed to sell surplus land in Seoul, South Korea, to a Samsung Tesco joint venture for approximately A$50 million, a premium to book value.

The pending deal comes after Visy's major Australian competitor, Amcor, secured a spot as a global packaging power by paying nearly A$3 billion for Germany's Schmalbach-Lubeca earlier this month. The highly acquisitive Amcor's purchase of the packaging assets made it the world's biggest manufacturer of PET bottles, with annual sales of A$3.3 billion.

The acquisition also made Amcor a leading player in the closure, or package sealing business, with combined sales of nearly A$1 billion. The buy will double the Melbourne-based Amcor's global sales to A$11 billion.