SYDNEY – Rio Tinto PLC said Tuesday has completed the almost $2 billion sale of some divisions of its Alcan business to Amcor Ltd. — taking another step toward cutting its debt load.
The London-based mining giant announced in December it would accept Australian packaging company Amcor's offer to buy Alcan Packaging's pharmaceuticals, tobacco and food divisions in Europe and Asia.
Rio Tinto has sold some $10.3 billion in assets since February 2008 to help pay off significant debt it built up buying Canadian aluminum giant Alcan for $38 billion in 2007. Selling non-core Alcan assets, such as the packaging operation, has been a key part of the debt strategy.
"The completion of this complex transaction is another significant step in the recapitalization of our balance sheet," Rio Tinto's chief financial officer Guy Elliott said in a statement.
He said Rio Tinto had divested $5.6 billion in assets that, along with rights issues and strong cash flows, would give the company flexibility to take advantage of investment opportunities as they arise.
The deal does not include the sale of Alcan Packaging Medical Flexibles in the United States, which is still under review by the U.S. Department of Justice.
EU antitrust regulators approved the plan earlier this month after telling Amcor, an Australian packaging company, it must sell two pharmaceutical packaging plants. That was to eliminate concern the deal would knock out a major rival and make Amcor a very strong European supplier for laminated drug sachets and the foil used for pill blister packs.
Melbourne-based Amcor is the world's largest maker of PET packaging commonly used in drink bottles and other containers, and makes wine bottles, cardboard boxes and a wide range of other packaging products. Alcan Packaging specializes in making packaging for food and beverages, as well as pharmaceutical, medical, beauty and tobacco products.
Rio Tinto's U.S.-traded shares rose $12.60, or 6.5 percent, to close Monday at $206.62.
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