Visy buys PET facilities

- Last updated on GMT

Related tags: Sales

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.

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.

Related topics: Processing & Packaging

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