Amcor (ASX:AMC) Buys Alcan Assets from Rio (ASX:RIO) For US$2B

Sydney, Aug 18, 2009 AEST (ABN Newswire) - Amcor Ltd. (ASX:AMC), the world's largest maker of plastic soft drink bottles, said Tuesday that it will buy parts of Rio Tinto's (ASX:RIO) Alcan Packaging business for US$2.025 billion to expand its existing business in Asia and Europe.

Amcor has made a binding offer to acquire Alcan Packaging's European and Asian food, and global pharmaceuticals and tobacco businesses. The company will fund the acquisitions through a combination of underwritten equity of A$1.611 billion and committed bank debt of US$1.20 billion.

After the acquisition, Amcor will be among the world's largest packaging companies with a leading position in flexible packaging, folding cartons for tobacco and custom PET containers.

Amcor's Managing Director and CEO Ken MacKenzie said now is the right time in the economic cycle to be making acquisitions as asset values are substantially lower than they have been for many year.

Amcor expects to achieve EBITDA synergies of A$200 million to A$250 million per annum within three years following completion of the acquisition.

Rio Tinto acquired Alcan in 2007 with US$38.1 billion before the global credit crunch. The mining giant was trying to offload the assets as the Alcan takeover deal brought the company a heavy debt burden. But it was hard for Rio to find buyers or receive good offers during the global downturn.

Rio's Chief Financial Officer Guy Elliott said Amcor's offer is in the interests of all stakeholders. Rio has already agreed to asset sales of US$6.6 billion over the last 18 months. Commodities prices rebounded as the global economy showed some signs of improvement. Rio believes that the sale of Alcan packaging further will further strengthen the miner's balance sheet.

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Michelle Liang Asia Business News Asia Bureau Tel: +61-2-9247-4344 Email: michelle.liang@abnnewswire.net