Rexam Sells Health-Care Units to Montagu for $805 Million

Rexam Plc, the largest drinks-can maker, agreed to sell its health-care unit’s pharmaceutical- and retail-packaging businesses to Montagu Private Equity LLP for $805 million.

Rexam, a maker of cans for Coca-Cola Co., Anheuser-Busch InBev NV and PepsiCo Inc., plans to return 450 million pounds ($735 million) of the proceeds to shareholders after the deal’s completion, expected in the middle of the year, it said today.

“Following the sale of health care, we will be a focused beverage cans business with a strong financial position,” Chief Executive Officer Graham Chipchase said in today’s statement. “Our strategy is to balance growth and returns and we will continue to pursue selective investment opportunities in beverage cans in higher growth markets.”

Rexam rose 1.4 percent to 500 pence by the close in London trading, valuing the company at 3.96 billion pounds.

The two businesses for sale, making up 85 percent of the health care unit’s earnings before interest, tax, depreciation and amortization, had about 250 million pounds of revenue and employed 1,500 people in 2012, according to the statement. The health care unit also holds closures and containers operations and Rexam is in discussions over their sale, it said.

Rexam has divested packaging businesses to focus on drinks-can production, accounting for about 90 percent of sales. It sold its personal-care units for $709 million in 2012 and returned 370 million pounds to shareholders.

Its health-care packaging includes products ranging from tubes, tablet dispensers, dosing systems for nasal sprays and eye drops to components for insulin pens and diagnostic instruments, according to the company’s website.

London-based Montagu entered into exclusive talks with Rexam to buy the units, Bloomberg News reported last month, citing three people familiar with the matter.

Before it's here, it's on the Bloomberg Terminal.