Rexam to sell healthcare packaging business to Montagu

3 February 2014 (Last Updated February 3rd, 2014 18:30)

Global drinks can manufacturer Rexam has agreed to sell its pharmaceutical devices and prescription retail packaging units to Montagu Private Equity for $805m.

Rexam

Global drinks can manufacturer Rexam has agreed to sell its pharmaceutical devices and prescription retail packaging units to Montagu Private Equity for $805m.

The two business units employed 1,500 people and recorded sales of £250m in 2012.

The transaction is subject to consultation with several European works councils. It would be completed in mid-2014.

Rexam plans to return approximately £450m to shareholders from the sale through a redeemable B share scheme along with a share consolidation.

Rexam CEO Graham Chipchase said that the sale of its healthcare business divisions is part of a plan to maximise shareholder value.

"The pharmaceutical devices and prescription retail packaging divisions represent the majority of the value of our healthcare business," Chipchase added.

"Following the sale of healthcare, we will be a focused beverage cans business with a strong financial position."

Rexam is also holding talks regarding the sale of its closures and containers division, which makes plastic bottles for over-the-counter medicine.