The transaction is conditional on competition authority approvals in Germany and Poland.
In 2006, Rexam Glass, which employs 3,600 people and focuses on the north European market, reported sales of £437m and operating profit of £40m before allocation of central costs amounting to £4m. Following the disposal, the central costs will be reapportioned to Rexam's other business segments. As at 31 December 2006, Rexam Glass had net operating assets of £372m including goodwill.
The sale follows a review of the position of the glass business within Rexam's consumer packaging portfolio and is consistent with Rexam's strategy to focus investment on organic growth and acquisitions in higher growth and emerging markets. In the short term the proceeds will be used to reduce borrowings.
Commenting on the sale, Leslie Van de Walle, Rexam's CEO, said: "Rexam Glass is a strong, well run operation and will fit well with Ardagh, a dedicated player in glass. Rexam's strategy remains to focus on profitable growth in its core Beverage Can and Plastic Packaging businesses. We have a strong track record of achieving high rates of return on our investments and the proceeds from this sale provide the financial flexibility to generate attractive long term returns for our shareholders."