News

Alcan's packaging arm is to be sold following the group's £19bn ($38bn) takeover by mining group Rio Tinto.

Alcan's packaging arm is the only section of the business earmarked for immediate divestment, while its bauxite and alumina, primary metal and engineered products divisions will all be absorbed into the new firm.

The deal, which Alcan chairman Yves Fortier said would give shareholders "a very attractive all-cash premium" on their stock, will establish Rio Tinto Alcan as the world's largest aluminium company, with an estimated annual output of 4.4 million tonnes.

Lansdowne Capital analyst Tim Rothwell said a private equity firm would be the most likely buyer for Alcan Packaging.

"The main players in the consumer packaging market are unlikely to come forward with a bid for Alcan Packaging as a whole," he said.

However, he said trade buyers would be more likely if the packaging division were broken up and offered for sale as smaller entities, for example, into flexibles, rigid plastics and cartons.

In May, Alcan was the subject of a takeover bid by rival Alcoa, but this failed after Alcan's board described the offer as "inadequate" and called on shareholders to reject it.

Alcoa may raise its offer for Alcan, but Rothwell said this was unlikely. He also said there was speculation that BHP Billiton may attempt to trump Rio Tinto's offer price.