Metal packaging supplier Ball Corporation and a private equity firm Platinum Equity have announced that they have entered into a joint venture and definitive purchase agreements to form Ball Metalpack.

Ball Metalpack is a new packaging company that will manufacture steel containers for aerosol products, food, household consumables, pet food, nutritional and other products.

“This agreement enhances our ability to immediately return additional value to shareholders via share repurchases, reduce Ball’s leverage and grow EVA dollars.”

Ball Corporation will contribute its US steel food and aerosol packaging manufacturing assets to the joint venture. These include the following tinplate steel assets: Canton (Brookline and Warner Rd.) and Columbus, Ohio; Milwaukeeand Deforest, Wisconsin; Chestnut Hill, Tennessee; Horsham, Pennsylvania; Springdale, Arkansas, and Oakdale, California.

These U.S tinplate steel assets had sales of  $746m in 2017, and a comparable operating earnings of $48m last year.

In return, Ball Corporation will receive more than $600m in pre-tax proceeds from the transaction and will retain 49% interest in Ball Metalpack, for a total value of approximately $675m.

Ball chairman, president and CEO John Hayes said: “This agreement enhances our ability to immediately return additional value to shareholders via share repurchases, reduce Ball’s leverage and grow EVA dollars.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“More than half of the proceeds from today’s announcement will be used to repurchase stock, increasing the 2018 share buyback to be in the range of $675m by year end.

“Our 2019 financial goals of $2bn of comparable EBITDA and free cash flow in excess of $1bn remain unchanged, although they will be slightly more challenging to achieve following the sale of these assets and its related earnings and cash flow.”

Ball will retain whole ownership of its aluminium aerosol packaging facilities in the US, Canada, Europe, India and Mexico, and its steel aerosol facilities in Argentina.

The company will also continue to own the Findlay, Ohio, metal packaging facility, which produces aluminium beverage containers.

The Findlay facility has a contract to supply two-piece steel food cans to Ball Metalpack.

As part of the deal, around 1,300 Ball employees will be transferred to the joint venture firm.

The transaction is expected to be completed next month.