Packaging firm Rexam Plc (REXMY.PK,REX.L) announced the proposed sale of its Personal Care business for $709 million in cash or 452 million pounds at current exchange rates. The business is being sold in two parts namely the Cosmetics, Toiletries and Household care products business or CTH and the High Barrier Food packaging business or HBF.
Sun Capital Partners Inc's affiliate has made a binding offer for CTH for $459 million cash, while Silgan Holdings Inc (SLGN: Quote)'s subsidiary has agreed to purchase HBF for $250 million cash. The transactions may be complete in the third quarter of 2012 for HBF and fourth quarter for CTH and are conditional on certain regulatory approvals. The Personal Care business employs nearly 7,000 people in Europe, the US and Asia.
An impairment charge of about 200 million pounds is expected at the half year arising from the sale of CTH, which would be broadly offset in the second half by a gain on the sale of HBF, associated foreign exchange gains and tax credits. As a consequence of the sale, Rexam would carry out a restructuring programme to remove residual overheads which, together with certain separation costs, would give rise to an exceptional charge of some 40 million pounds in 2012, of which 25 million pounds would be cash costs.
Following this, Rexam intends to return around 370 million pounds to shareholders which would be effected by way of a redeemable B share scheme together with a share consolidation.
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by RTT Staff Writer
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