The American packaging giant Ball Corporation (BLL) has recently announced plans to sell its beverage packaging and end manufacturing facilities to the Chinese packaging company ORG Technology Co. Ltd., in a USD 225 million deal.
According to sources familiar with the matter, the overall $225 transaction consideration includes cash and additional consideration pertaining to a current facility’s relocation over the upcoming years, which is expected to be within a $50-$75 million range. Under the deal, BLL has also agreed to co-operate on future commercial prospects with mutual customers by taking advantage of the expertise of ORG in China & BLL in the current operational markets.
The BLL assets included in the sale are coke cans & end plants in Foshan, Beijing, China, Hubei and Qingdao, and other associated contracts & related assets, cite sources. They further claim that the Ball will license its metal packaging technology to ORG and reinvest about $50 million in the company’s shares, through the proceeds from the expected relocation.
John A. Hayes – President, CEO, and Chairman at Ball Corp., was quoted saying that the arrangement of the sale will help both the parties to leverage their own geographic strengths. He further stated that it will allow Ball to carry on its well-organized approach towards capital allocation by eliminating capital that is unlikely to generate profits.
According to a report by Denver Business Journal, the U.S.-based packaging company will continue to operate its wholly-owned facility in Myanmar and has joint ventures based in South Korea, Vietnam, Thailand and Taiwan. Arps, Skadden, Meagher & Flom LLP, and Slate are serving as the legal counsel for Ball Corporation and Goldman Sachs & Co. LLC is operating as the financial advisor.
The transaction is subjected to customary approval from the regulators and is slated to be closed during 2019’s second half.