Rexam to Sell Health-Care Division After Receiving Interest
Rexam Plc (REX), the world’s biggest drinks-can maker, plans to start the sale of its health-care unit this year after receiving inquiries from potential buyers.
“We have a lot of interest at the moment,” Chief Executive Officer Graham Chipchase said today. While Rexam has always been open to “good” offers for the unit, which accounts for 10 percent of sales, no bids have yet come in, he said.
The company, which reported a 43 slump in net income last year, plans to bolster profit by selling the health-care unit, which has more than 3,000 staff and 14 factories on three continents and makes plastic packaging for pharmaceuticals. By divesting the business, Rexam can focus on beverage-can production, which accounts for about 90 percent of revenue.
“Health care is not core, and we have got strong business with a strong pipeline.” Chipchase said on a conference call. The London-based company makes cans for Coca-Cola Co., Anheuser-Busch InBev NV (ABI) and PepsiCo Inc. (PEP)
Rexam will post “slightly” lower operating profit for the first half than a year earlier when it reports Aug. 2, and sees “modestly” lower 2013 results than previously forecast, the CEO said, citing “disappointing” volumes in South America and western Europe in April and May. “We still expect full-year performance to show improvement over 2012,” he said.
Rexam declined 2.5 percent to 453.7 pence in London, the lowest closing price in almost a year. Trading volumes were more than four times the three-month daily average.
“It has been a challenging first half, but we have taken assertive action on costs to mitigate the impact on our performance and maintain our capital discipline,” Chipchase said.
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