Crown Holdings buys Heineken packaging businesses in Mexico
Crown Holdings will buy Empaque in a cash transaction valued at $1.225 billion, subject to adjustment. The acquisition is subject to customary closing conditions, including competition authority approval, and is expected to close by year end 2014 and contribute between $0.15 and $0.20 per share to Crown's 2015 earnings before synergies, but including estimated amortization and depreciation for purchase accounting adjustments.
Information regarding the expected amount and timing of synergies will be provided in due course.
According to Crown chairman and chief executive officer John W. Conway, the acquisition of Empaque will significantly enhance Crown's strategic position in beverage cans, both regionally and globally.
In North America, Crown will become the second largest beverage can producer, supplying over 24 billion units annually to a balanced portfolio of beer and soft drink customers. On a worldwide basis, after closing Crown will supply over 62 billion units annually, representing 20% of all beverage cans globally.
Crown will also bolster its already industry-leading geographic footprint, as over 50% of beverage can revenue will be attributable to the faster growing developing regions. Long-term supply agreements with Heineken affiliates will also provide a stable cash-flow base for the Empaque business in Mexico.
With projected 2014 sales of approximately $700 million and EBITDA of approximately $150 million, Empaque, headquartered in Monterrey, Mexico, currently operates two beverage can plants, a plant that manufacturers beverage can ends, aluminum closures and bottle caps, a glass bottle plant and a glass service facility in Mexico, with a total of approximately 1,500 employees. ■