Ball to sell Chinese beverage can and end manufacturing facilities to ORG
Ball Corporation has announced an agreement to sell its metal beverage packaging facilities in China to ORG Technology, a Chinese metal packaging company, for approximately $225 million.
Assets included in the sale are beverage can and end plants in Beijing, Foshan, Hubei and Qingdao, China, associated contracts and other related assets. As part of the transaction, Ball will license its beverage can and end technology to ORG in China, and reinvest approximately $50 million in ORG’s shares, while agreeing to co-operate on future commercial opportunities with mutual customers by leveraging the expertise of ORG in China and Ball in the markets it serves.
“This arrangement allows each party to leverage its own geographic strengths, while allowing Ball to continue our disciplined approach to capital allocation by freeing up capital that does not generate our required returns,” said John A. Hayes, Ball chairman, president and CEO.
Ball will continue to serve the growing demand for sustainable aluminium beverage packaging in other parts of Asia from its wholly owned Myanmar facility and joint ventures located in Vietnam, Thailand, South Korea and Taiwan.
Proceeds from the sale will support Ball’s ongoing global growth initiatives and multi-year share repurchase programme. The announcement will have an immaterial effect on Ball’s 2019 goals of $2 billion of comparable EBITDA and free cash flow in excess of $1bn.
The transaction is subject to customary regulatory approvals and is expected to close during the second half of 2019.