London-based firm makes cans for Coca-Cola, PepsiCo and Heineken; buys 51% stake
Beverage cans maker Rexam Plc said it bought a 51 percent stake in Saudi Arabia's United Arab Can Manufacturing Ltd, a supplier to The Coca-Cola Co, for $122 million as part of its strategy to expand in emerging markets.
Rexam, which makes cans for Coca-Cola, PepsiCo Inc and Heineken, said UAC's plant in Dammam, Saudi Arabia, has an annual capacity of 1.8 billion cans.
UAC had earnings before interest, taxes, depreciation and amortization of about $29 million in 2012,London-based Rexam said.
"Growth prospects for the beverage can in the Middle East are attractive," Rexam chief executive Graham Chipchase said in a statement.
The deal is expected to close in the third quarter of 2014.
Rexam, which set up an office in Dubai last year to focus on Africa, the Middle East and Asia, said in November that it expected emerging markets such as Brazil and India to perform well in 2014.
UAC's shareholders include Olayan Financing Company, Aujan Industries Co LLC, The Coca-Cola Bottling Company of Saudi Arabia and Al-Jabr Trading Company.
Rexam recently sold the bulk of its healthcare packaging business to Montagu Private Equity for $805 million in cash to focus on making beverage cans.
Rexam is due to report its full-year results on February 20.
Shares in the company were up marginally at 511 pence at 1510 GMT on the London Stock Exchange on Thursday.