Shares in Melbourne-based Amcor have halted trading on the ASX ahead of an expected announcement from the company, which will fund the deal with a $1.6bn equity-raising initiative.

The deal will give Amcor an unprecedented worldwide market share, with the Australian Financial Review reporting that it will hand them 40 per cent of the flexible food packaging market in Europe, 14 per cent of flexible packaging in the US, 45 per cent of the global pharmaceutical and medical packaging market, and 48 per cent of the European tobacco packaging market. As a result, the deal will be subject to approval from the European Commission.

Canada-based Alcan is being offloaded by owner Rio Tinto, which is trying to relieve a $10bn debt by selling several of its assets. Rio acquired Alcan in 2007, with its plans to offload the packaging aspect of the company stymied by the global financial crisis.

Amcor is not expected to acquire the personal care and beauty packaging assets of Alcan, with Alcan also having sold its food packaging operations earlier this year to US company Bemis.

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