Remax buys US firm in $1.5bn deal

The world's biggest drinks can maker Rexam has snapped up an American plastic packaging firm for around $1.57bn (€1.18bn).

London-based Rexam, which includes Coca-Cola among its customers, said the deal would enhance its own plastics division, while extending its access in the fast-growing healthcare market.

It said it will fund the deal from the proceeds of the sale of its glass bottle division for £448m (€660m) to Irish company Ardagh in March, as well as the placing of 58 million shares.

O-I Plastics makes and sells plastic pharmaceuticals packaging and medical devices, such as syringes, for both the human and animal healthcare market. Its customers include firms such as Pfizer and Bristol-Myers Squibb.

The group also manufactures prescription packaging, including child resistant tops and dropper bottles, for pharmaceutical distribution companies.

Rexam said the deal will establish it as the leading manufacturer of rigid plastic healthcare packaging in the US, a market which it estimates is worth some $4bn (€3bn), growing at around 7% a year.

It added that the deal would transform the scale of its plastics division, which last year reported a 53% rise in sales to £720m (€1bn). It aims to make cost savings of around $40m (€30m) a year by 2010.

Rexam, which employs some 24,200 people in 20 countries worldwide, agreed to sell its glass bottles business in March to concentrate on its core drinks can and plastics business.

Last year, the group reported sales of £3.6bn (€5.3bn).

O-I Plastics is headquartered in Ohio and operates 19 manufacturing plants, mainly in the US and Puerto Rico. It employs some 2,800 people.