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Amcor divests stake in BCNA for $122 million

Published 2024/10/31, 22:18
© Reuters
AMC
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ZURICH - Amcor (NYSE: NYSE:AMCR, ASX: AMC), a global packaging company, has announced the sale of its 50% interest in the Bericap North America joint venture to an undisclosed buyer for $122 million. The transaction, which involves a partnership with Germany's Bericap established in 1997, is set to close by December 31, 2024.

The joint venture, which produces closures for various markets, contributed approximately $190 million in sales and $19 million in adjusted EBIT to Amcor's Rigid Packaging (NYSE:PKG) business for fiscal 2024. Amcor's share of the adjusted net income from the venture was about $8 million.

According to Amcor CEO Peter Konieczny, the decision to sell the stake comes after differing views on capital requirements and expected returns with Bericap. Despite the sale, Amcor continues to show interest in the closures market, maintaining a disciplined approach to capital allocation.

The proceeds from the sale will be directed towards reducing Amcor's debt. The company anticipates that the net effect of the sale, after accounting for reduced interest expenses, will not impact its financial outlook for fiscal 2025.

Amcor, a leader in responsible packaging solutions, operates in 40 countries with annual sales of $13.6 billion in fiscal 2024. The company focuses on recyclable and reusable packaging, with a commitment to innovation and sustainability.

This move is part of Amcor's strategic efforts to optimize its portfolio and maintain financial discipline. The information for this report is based on a press release statement.

In other recent news, AMC Entertainment (NYSE:AMC) has been the focus of several analyst firms. Roth/MKM kept its Sell rating on AMC stock and adjusted its revenue and EBITDA estimates for the third quarter to $1.326 billion and $160 million, respectively. The firm noted that AMC's debt maturities have been extended, providing some relief for the company. However, AMC's absolute debt levels remain high and the current valuation is considered elevated.

Citi also maintained its Sell rating on AMC, despite acknowledging improvements in the company's third-quarter performance and recent financial maneuvers. The firm's analysis led to a slight increase in their estimates for AMC, but the overall outlook on AMC's stock remains unchanged.

AMC has also made significant strides in improving its financial position, eliminating $152.9 million in debt through equity issuance. The company also announced the appointment of Marcus Glover to its Board of Directors.

In other company news, Amcor has initiated significant leadership changes with the appointment of Peter Konieczny as CEO, Fred Stephan as Chief Operating Officer, and David Clark as Chief Sustainability Officer. Graham Chipchase has also been nominated for election as a non-executive director. These are all recent developments for both AMC Entertainment and Amcor.

InvestingPro Insights

To complement the news of Amcor's (NYSE: AMCR, ASX: AMC) sale of its stake in the Bericap North America joint venture, let's examine some relevant financial metrics and insights from InvestingPro.

According to InvestingPro data, Amcor's market capitalization stands at $13.53 billion, reflecting its significant presence in the global packaging industry. The company's revenue for the last twelve months as of Q2 2024 was $14.17 billion, with a modest revenue growth of 1.19% over the same period. This aligns with the company's reported annual sales of $13.6 billion in fiscal 2024 mentioned in the article.

An InvestingPro Tip highlights that Amcor's stock price has fallen significantly over the last year, with a 1-year price total return of -17.41%. This context adds perspective to the company's decision to sell its stake in the joint venture and focus on debt reduction, potentially aiming to improve its financial position and shareholder value.

Another relevant InvestingPro Tip notes that Amcor maintains a high dividend yield, which could be attractive to income-focused investors. This dividend policy, combined with the company's strategic portfolio optimization, suggests a balanced approach to capital allocation and shareholder returns.

For readers interested in a deeper analysis, InvestingPro offers 14 additional tips for Amcor, providing a comprehensive view of the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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