Allianz doubles money on Schmalbach-Lubeca

Allianz Capital Partners and E.ON have agreed to sell their remaining stake in Schmalbach-Lubeca, after making a partial exit earlier this year. Subject to regulatory approval, the drinks can manufacturer has been acquired for around EURO1.2 billion by US packaging manufacturer Ball Corporation. Ball will be acquiring the German-based company for approximately EURO900 million in cash, the assumption of EURO16 million of net debt and EURO250 million in pension liabilities.

Allianz acquired the business in June 2000 through AV Packaging, a buyout vehicle jointly funded by Allianz and E.ON, the German utility group that previously owned a 60 per cent stake in Schmalbach-Lubeca. AV Packaging paid DM14.669 per share, or an enterprise value of around EURO1.3 billion, to acquire the remainder of the company’s publicly quoted shares. Allianz invested equity of EURO250 million for a 51 per cent majority stake in AV Packaging and E.ON retained a 49 per cent shareholding, with a view to eventually disposing of its interest in the company.

Earlier this year Schmalbach-Lubeca sold its PET and White Cap businesses to Amcor, an Australian firm, for EURO1.8 billion. Proceeds from this transaction were used to repay debts. After the settlement of liabilities Allianz and E.ON will receive a total of EURO1.7 billion from this and the current deal. Of this, EURO1 billion will go to E.ON, which will post a book gain of about EURO550 million. Allianz will double its original investment.

Thomas Putter, chairman of Allianz Capital Partners, said: “By providing capital and the relevant know-how, we accompanied the firm during a successful growth phase. With Amcor and Ball, two investors have now been found with the best possible prerequisites for further strategic development of the business areas. For ACP, the involvement with Schmalbach-Lubeca was an extremely worthwhile investment.”

Schmalbach-Lubeca, headquartered in Ratingen, Germany, operates 12 manufacturing plants in Germany, the UK, France, the Netherlands and Poland. The company produces over 12 billion aluminium and steel beverage cans and easy-opening can ends. It employs approximately 2,500 people and has forecasted sales in 2002 in excess of $1 billion.

Following the transaction, Schmalbach-Lubeca will be operated as a European subsidiary of Ball. Hanno C Fiedler, chairman and chief executive officer of Schmalbach-Lubeca, is expected to become an executive vice president of Ball Corporation and head of Ball’s new European operations. Together Ball and Schmalbach-Lubeca will produce over 45 billion beverage cans annually in North America and Europe. The transaction is expected to close in late 2002 or early 2003.