O-I specialises in container glass products. Credit: Heather.

Container glass products manufacturer O-I Glass has signed an agreement to divest its Australia and New Zealand (ANZ) business unit to packaging and resource recovery company Visy Industries.

As per the definitive agreement, the sale will be completed in two separate transactions.

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In addition to selling the O-I ANZ business to Visy, the company entered into a sale-leaseback agreement with Charter Hall for certain properties.

The deal, which includes the sale and sale-leaseback agreement, is valued at approximately A$947m ($661m).

O-I Glass CEO Andres Lopez said: “The sale of our ANZ operations is consistent with our strategy to properly align our business with the interests of our global customer base, improve financial flexibility and maximize shareholder value.

“O-I will continue to develop its leading market positions across Europe and the Americas as well as the company’s interests in Asia.

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“The sale of ANZ follows an in-depth strategic review of our global business portfolio and operating structure which is now substantially complete following this transaction.”

The sale to Visy is subject to customary closing conditions. Both the transactions have received regulatory approvals and are expected by to close by 31 August 2020.

O-I Glass will use net proceeds from the sale to reduce debt

O-I ANZ manufactures glass bottles and containers in Australia and New Zealand. The unit operates five manufacturing facilities located in Adelaide, Brisbane, Melbourne, Sydney and Auckland, as well as one recycled glass processing plant in Brisbane.

Last year, the business generated sales of about A$754m ($528m) and EBITDA of approximately A$124m ($86.8m).