Proposed sale of Personal Care

 3 July 2012

Rexam announces proposed sale of Personal Care for $709m (£452m) and return of around £370m to shareholders

Rexam PLC, the global consumer packaging company, announces the proposed sale of its Personal Care business for a total of $709m in cash (£452m at current exchange rates).

The business is being sold in two parts: the Cosmetics, Toiletries and Household care products business (CTH) and the High Barrier Food packaging business (HBF). An affiliate of Sun Capital Partners Inc, a private equity firm, has made a binding offer for CTH for a total of $459m in cash, subject to consultation with various European works councils. A subsidiary of Silgan Holdings Inc, a leading US based supplier of packaging for consumer goods products, has agreed to acquire HBF for $250m in cash. Both transactions are subject to certain adjustments at completion.

The transactions are expected to complete in Q3 2012 for HBF and Q4 2012 for CTH and are conditional on certain regulatory approvals.

In total, the Personal Care business employs some 7,000 people in Europe, the US and Asia. In 2011, the business had sales of £502m and underlying operating profit of £38m before central overheads (CTH: £26m and HBF: £12m). As at 31 December 2011, it had gross assets of £650m (CTH: £611m and HBF: £39m) and liabilities of £112m (CTH: £103m and HBF: £9m). It is expected that there will be an impairment charge of some £200m at the half year arising from the sale of CTH, which will be broadly offset in the second half by a gain on the sale of HBF, associated foreign exchange gains and tax credits.

As a result of the sale, Rexam will carry out a restructuring programme to remove residual overheads which, together with certain separation costs, will give rise to an exceptional charge of some £40m in 2012, of which £25m will be cash costs. Ongoing, there will be £7m of annual retained fixed costs which will be absorbed by the Beverage Cans and Healthcare businesses.

Following completion, Rexam plans to return around £370m (at current exchange rates) to shareholders which, it is anticipated, will be effected by way of a redeemable B share scheme together with a share consolidation.

Investors

Sandra Moura, Head of Investor Relations +44 20 7227 4100

Media

Claire Jenkins, Group Director Corporate Affairs +44 20 7227 4100

Richard Mountain, FTI Consulting +44 20 7269 7186

Barclays and Rothschild advised Rexam on the transaction.