Rio Tinto Completes Sales Of Alcan Packaging To Amcor

Rio Tinto Ltd. (RTP) has completed the US$1.948 billion sale of its Alcan packaging assets to Amcor Ltd. (AMC.AU), the two companies said in statements Tuesday.

The total price agreed between the pair in August last year was US$2.025 billion but Rio Tinto said the sale completed Tuesday excludes the Alcan packaging medical flexibles operations in the U.S., which are the subject of an ongoing review by the U.S. Department of Justice.

Amcor said the purchase gives it leading global positions in the strategic growth markets for flexible packaging and folding carton packaging for tobacco.

"From a strategic perspective, the businesses we have acquired are strongly aligned with our nominated growth segments and provide the ability to substantially improve the value proposition for our customers," Amcor Chief Executive Ken MacKenzie said.

"We are now focused on ensuring seamless integration of these businesses and on achieving the synergies and opportunities offered by this acquisition."

Amcor said earnings for the Alcan packaging businesses increased in the second half of calendar 2009 due to improved economic conditions and benefits from earlier restructuring.

Rio Tinto has been carrying out divestments to repair its balance sheet and pay down the debt it took on in its US$38.1 billion purchase of Alcan in 2007.

Rio Tinto's Chief Financial Officer Guy Elliott said the Amcor deal is another significant step in the miner's recapitalization and that it has now completed divestments of US$5.6 billion since the start of 2009.

"These proceeds, together with the proceeds from our successful rights issues and strong underlying cash flows, provide us with the flexibility to pursue value adding investment opportunities as they arise," Elliott said.

-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094; [e-mail]