Rexam PLC takes further step in the consolidation of the German glass container industry

Rexam PLC, the global consumer packaging company, announces that it has today reached agreement with family shareholders to acquire 100% of Lüner Glashüttenwerke GmbH (“Lüner Glas”), a German glass container manufacturer.

The consideration is £33m, comprising £3.5m in cash payable for the shares and £29.5m of estimated debt and financial liabilities assumed with the company.In addition, pension liabilities assumed amount to £1.8m.

The transaction is subject to regulatory approval by German competition authorities.

Lüner Glas, which employs around 430 people, has two sites in Germany, one near Düsseldorf and one near Berlin. It produces flint glass containers primarily for the food market.

The acquisition of Lüner Glas complements Rexam’s £68m acquisition of Nienburger Glas, another German glass container manufacturer, which was completed on 29 November 2002.

The acquisitions will increase Rexam’s presence in the German glass container industry to seven glassworks and provide it with a broad end use spectrum from beer and wine through carbonated soft drinks to food and pharmaceuticals.

The acquisitions are expected to lead to some £6m of synergies per year by 2004 and are anticipated to exceed Rexam’s cost of capital in 2003.

Rexam proposes to partly finance the aggregate consideration of approximately £101m for the Lüner Glas and the Nienburger Glas acquisitions through a placing (“the Placing”) by Hoare Govett Limited of up to 21.57m new ordinary shares, representing approximately 5 per cent of Rexam's current issued ordinary share capital. The Placing, which will be the subject of an accelerated bookbuild, is expected to raise approximately £85m before expenses. The Placing is not conditional on the completion of the Lüner Glas acquisition.

Commenting on today’s announcement, Rolf Börjesson, Rexam’s Chief Executive, said: “The acquisitions of Nienburger and Lüner are in line with our strategy to consolidate the German glass industry. We anticipate that they will help create significant cost saving synergies in this fragmented market and be earnings enhancing in 2003. In addition to giving us a good balance between food and beverage customer groups, they reinforce our long term commitment to relationships with key customers in Germany and across continental Europe. The Placing gives Rexam additional financing flexibility and will enable us to fund further small acquisitions during 2003 without recourse to equity markets. We see opportunities for bolt on acquisitions primarily in the European glass industry or in the plastics markets served by Rexam.”

600450 Rexam PLC takes further step in the consolidation of the German glass container industry
Date: 10 January 2003

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