Ball to acquire Schmalbach-Lubeca
second largest beverage can manufacturer in Europe. Combined, the
two companies produce more than 45 billion beverage cans annually
in North America and Europe.
Ball Corporation has agreed to acquire Schmalbach-Lubeca, the second largest beverage can manufacturer in Europe. Combined, the two companies produce more than 45 billion beverage cans annually in North America and Europe.
Ball will be acquiring the German-based company for approximately €900 million in cash and the assumption of approximately €16 million euros of net debt. The final purchase price is subject to working capital and other post-closing adjustments. The transaction is expected to close in late 2002 or early 2003.
Schmalbach-Lubeca, headquartered in Ratingen, Germany, operates 12 manufacturing plants -- four each in Germany and Great Britain, two in France and one each in the Netherlands and Poland. The company produces more than 12 billion aluminum and steel beverage cans and easy-opening can ends, employs approximately 2,500 people and has forecasted sales in 2002 in excess of €1 billion.
"This strategic acquisition will provide better geographic balance in our largest product line, and it will give us a major presence in the world's second largest market for beverage cans," said David Hoover, chairman, president and chief executive officer of Ball Corporation. "The addition of Schmalbach-Lubeca will provide Ball a solid number two position in Europe to go with our number one position in the larger North American market."
Hoover added that the acquisition of Schmalbach-Lubeca is immediately expected to earn in excess of Ball's cost of capital and to be accretive to Ball's full year 2003 results by more than 15 per cent. Also in 2003, Schmalbach-Lubeca should add significantly to Ball's already strong cash flow from operations. He said the acquisition will have little or no effect on Ball's 2002 earnings per share.
The European beverage can industry supplied approximately 38 billion units in 2001, an increase of more than 7 per cent over 2000. Schmalbach-Lubeca has approximately 31 per cent of the installed beverage can manufacturing capacity in Europe.
"We believe there is an excellent fit between Schmalbach-Lubeca and Ball. Like Ball, Schmalbach-Lubeca has a highly skilled workforce, excellent manufacturing facilities, strong research and development capabilities and an experienced and successful management team," Hoover said. "The European market has been growing and the customer base is consolidating. This represents an excellent opportunity for a company like Schmalbach-Lubeca, which enjoys superior customer relations and a solid reputation for quality and innovation. We see tremendous opportunity for best practices sharing from the combination of our companies."
After the transaction, Schmalbach-Lubeca will be operated as a wholly owned European subsidiary of Ball. Hoover said that Hanno C. Fiedler, chairman and chief executive officer of Schmalbach-Lubeca, is expected to become an executive vice president of Ball Corporation and head of Ball's new European operations. Completion of the acquisition is subject to various conditions, including regulatory approvals.
"This is a large and strategically important acquisition for Ball Corporation," Hoover said. "It is similar in size and scope to the acquisition we made in 1998 of the Reynolds Metals beverage can manufacturing assets in North America. That was very much a synergy driven acquisition, and the integration of that business into Ball is complete and has been highly successful. »Since the sale of its plastic container and White Cap closure businesses to Australian company Amcor earlier this year, Schmalbach-Lubeca consists entirely of its beverage can business. The company has been in the packaging industry throughout its history and introduced the beverage can in Germany in 1953.
Ball Corporation is one of the world's leading suppliers of metal and plastic packaging to the beverage and food industries. The company also owns Ball Aerospace & Technologies Corp. Ball reported 2001 sales of $3.7 billion (€3.9bn), of which approximately $3.3 billion came from its packaging segment and $400 million from its aerospace and technologies segment.
