Ball Corporation has completed its acquisition of Schmalbach-Lubeca, the second largest manufacturer of beverage cans in Europe, for approximately €900 million in cash.
Ball financed the acquisition and refinanced its existing bank debt with new credit facilities of $1.35 billion (€1.31bn) and the placement of $300 million in senior notes.
Schmalbach operates 12 beverage can and end manufacturing facilities, four each in Germany and the UK, two in France and one each in the Netherlands and Poland. The company employs approximately 2,500 people, produces more than 12 billion cans and ends a year and will record 2002 sales in excess of €1 billion .
R. David Hoover, chairman, president and chief executive officer of Ball Corporation, said the acquired business will operate under the new name of Ball Packaging Europe and will be headed by Hanno C. Fiedler. Ball Packaging Europe will be headquartered in the former Schmalbach offices in Ratingen, Germany.
Ball's board of directors has elected Fiedler, 57, as an executive vice president of Ball Corporation and he has joined the Ball board. He had been chairman of the board and CEO of Schmalbach-Lubeca AG since January 1996. Prior to that he was head of the European activities of TRW.
"We are very pleased with the way the acquisition process progressed and now to have Hanno Fiedler and his team as part of Ball Corporation. The addition of this management group to Ball's existing strong packaging management team, headed by Leon A. Midgett, positions us well for the integration of this major acquisition,"Hoover said.
Midgett, 60, is executive vice president and chief operating officer for all of Ball's worldwide packaging operations.
"It was our goal to complete the acquisition before yearend so we would have a full year of the benefits from the acquisition in 2003," Hoover said. "Having achieved that goal, we continue to expect that Ball Packaging Europe will be accretive to our 2003 results by more than 15 per cent and should add significantly to our already strong cash flow from operations."
Raymond Seabrook, senior vice president and chief financial officer, said the company was extremely pleased with the financing it had completed in conjunction with the acquisition.
"We were able to restructure our debt with very attractive terms and extend maturities in the process," Seabrook said. " Our solid performance and strong cash flow helped us achieve the attractive financing we did, and we expect to use that strong cash flow to pay down debt by $600 million over the next three years."
In addition to the approximate €900 million cash price, Schmalbach retained approximately €19 million euros in debt and €250 million in German pension liabilities. Ball Corporation is one of the world's leading suppliers of metal and plastic packaging to the beverage and food industries. The company also owns Ball Aerospace & Technologies. Ball reported 2001 sales of $3.7 billion, of which approximately $3.3 billion came from its packaging segment and $400 million from its aerospace and technologies segment.