Rexam cans personal care arm and returns cash to investors

 
City A.M. Reporter
BRITISH drinks can maker Rexam yesterday said it had agreed to sell its underperforming personal care business in two parts for $709m (£451.9m) in cash and return about £370m of the proceeds to investors.

Private equity firm Sun Capital Partners had agreed to buy the cosmetics, toiletries and household care division for $459m, Rexam said, while Silgan Holdings would acquire its high-barrier food packaging business for $250m.

Rexam put the businesses, which employ 7,000 people, on the block in February because they had been hit by rising costs and lower volumes. The unit had sales of £502m in 2011, and underlying operating profits of £38m before costs.

The company said it would restructure as a result of the sale at an exceptional cost of £40m, of which £25m would be cash costs.

It also expects to book a $200m impairment charge linked to the sale of the cosmetics business, the firm said in a statement yesterday.

Barclays and Rothschild are advising Rexam on the deals, which are both due to close by the end of the year.

Shares in Rexam closed up 2.3 per cent at 433.5p yesterday, valuing the FTSE 100-listed firm at around £3.7bn.