Rexam has signed a deal to sell its loss-making beverage closures business to Berry Plastics for $360m.
The closures business is focused on the North American market and employs about 1,500 people. It generated sales of £343m in 2010 but turned in a £177m loss before tax.
Rexam initially announced in December that it was considering the sale of the business, after identifying beverage closures as a weak spot in its product portfolio.
In its full year statement 2009, the UK-based company referred to the “enduring weakness in beverage closures”. And in its half year trading update last summer, the packaging company said: “In closures, performance continued to be disappointing. Although sales increased owing to resin pass through, volumes decreased 9 per cent with the continued decline in the demand for beverage closures.”
Despite the declining fortunes, plastics packaging specialist Berry Plastics is confident that it can make a success of the business.
“We are excited about the opportunities the Rexam SBC business will bring to Berry’s customers, employees and investors,” said Berry CEO Jonathan Rich, in a statement.
The deal, which is subject to regulatory approval, is expected to closure in Q3.