Packaging giant Amcor has made plans to demerge its Australasia and Packaging Distribution (AAPD) business in a bid to enhance shareholder value by enabling each company to pursue their own growth agendas and strategic priorities.
Ken MacKenzie, managing director and CEO, Amcor says, “To be a successful market leader, that delivers continuous improvement in customer value, a company must be focused in terms of product portfolio and end markets.” AAPD represented 24 per cent of Amcor’s $12.2bn turnover for the 2011-12 financial year, with sales of $2.9bn, and 25 per cent (S1.5bn) of Amcor’s $6bn turnover for the first half of the 2012-13 financial year.
MacKenzie says, “Although Amcor and AAPD are both packaging companies they are actually different in terms of product segments and geographic focus. Amcor has global leadership positions in the flexibles and rigid plastics segments, while APPD operates in the fibre, glass and beverage can packaging markets in Australasia and packaging distribution in North America and Australia.”
“Over the last six years, Amcor has invested significantly in APPD to improve its manufacturing capabilities and ensure it is well positioned for growth. These investments have been in excess of $1bn over that period and include the new recycled paper mill at Botany, a new furnace at the glass bottle plant at Gawler, and a new beverage can line in New Zealand. APPD will continue to benefit from these initiatives in terms of earnings and cash flow,” concludes MacKenzie.
Following the demerger, each company will have its own management team. MacKenzie will remain the managing director and CEO of Amcor, and Graeme Liebelt will be the chairman.
The new company will be listed on the Australian Securities Exchange and is yet to be named. Chris Roberts will become the chairman; Nigel Garrard, the current president of AAPD will be appointed CEO; John Pizzey and Jeremy Sutcliffe will join the board of the new company.
The demerger is intended to be implemented through a capital reduction and scheme of arrangement.
Subject to shareholder, court and other approvals, Amcor expects completion of the demerger to occur in December 2013.
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