Beverage can maker Rexam PLC has signed an agreement to acquire a 51% stake in beverage can maker United Arab Can Manufacturing Limited (UAC) for US$122m. The transaction is subject to regulatory approvals and is expected to complete in Q3 2014.
UAC makes beverage cans and can ends and is situated in Dammam, Saudi Arabia. The plant has an annual capacity of 1.8bn cans in both standard and specialty sizes. In 2012, the company generated EBITDA of c $29m.
Current shareholders of UAC comprise Olayan Financing Company, Aujan Industries Co. LLC, The Coca-Cola Bottling Company of Saudi Arabia and Al-Jabr Trading Company. All will continue to be shareholders in the company, which is to be renamed Rexam UAC, following the transaction.
Graham Chipchase, Rexam's Chief Executive said: "We have spoken for some time about the opportunities in emerging markets and I am delighted that we are seeing our strategy bear fruit with the acquisition of a controlling stake in United Arab Can. UAC is a modern business with respected partners, well established customer relationships, a strong competitive position in an attractive market with good returns. While the plant is operating well, given our own global scale and technical expertise, we see a number of opportunities for synergies. Growth prospects for the beverage can in the Middle East are attractive and we look forward to working together with our partners in UAC to lead further expansion in the region."