PITTSBURGH, Pa. - Alcoa announced Wednesday that it will look into strategic alternatives for its Packaging and Consumer unit, as well as two automotive sectors.
The Packaging and Consumer segment had $3.2 billion in revenues in 2006, accounting for about 10 percent of Alcoa’s overall revenues.
“Our packaging and consumer business is improving and strengthening. In fact, first quarter earnings more than doubled compared to the prior year as the benefits of our restructuring program are hitting the bottom line,” said Alain Belda, Alcoa Chairman and CEO. “However, now is the right time for us to explore whether these businesses may provide more value on their own or as part of another company.”
The businesses included in Alcoa’s review are:
• Flexible packaging, which manufactures laminated, printed and extruded non-rigid packaging materials
• Closure Systems International, which produces plastic and aluminum packaging closures and capping equipment
• Consumer Products, which produces branded and private label foil, wraps and bags
• Reynolds Food Packaging, which manufactures stock and custom products for the foodservice, supermarket, food processor and agricultural markets.
Alcoa is also reviewing alternatives for its Electrical and Electronic Solutions unit, formerly the AFL wireharness business, and automotive castings businesses. Combined, the businesses had 2006 revenues of $1.6 billion.
“While there can be no assurance that exploration of alternatives will result in any type of transaction, this initiative should unlock the value in these businesses,” said Belda.
Alcoa expects the process to be completed by the end of 2007.