Crown buys Spanish can maker for $1.64B

Crown's products include keg-shaped Heineken beer cans. The company's acquisition of Mivisa Envases SAU will strenghten its presence in Spain, chief executive officer John W. Conway said.
Crown's products include keg-shaped Heineken beer cans. The company's acquisition of Mivisa Envases SAU will strenghten its presence in Spain, chief executive officer John W. Conway said. (CHRIS RATCLIFFE / Bloomberg)
Posted: November 02, 2013

Crown Holdings, the Philadelphia maker of cans and other metal packaging, said Thursday that it agreed to acquire Mivisa Envases SAU, a Spanish food-can manufacturer, for 1.2 billion euros, or $1.64 billion.

The deal builds on Crown's existing European market, chief executive officer John W. Conway said in a company statement.

Crown is the world's top producer of food and aerosol cans and has come to specialize in shaped cans, such as the keg-shaped Heineken beer cans sold in some markets.

Blackstone Group, other equity investors, and Mivisa managers constitute the sellers. The acquisition, subject to regulatory approvals, is expected to close early in 2014, Crown said.

With 2012 sales of $8.5 billion, Crown estimates the metal-can market in Europe at $30 billion.

Mivisa, which has 10 factories, including one in Morocco, had sales of $754 million in the year ended June 30. It makes packaging for vegetables, fruit, fish, and meat.

"We were very weak there," Conway, on a conference call with analysts, said of Crown's presence in Spain. "Mivisa is very strong."

He praised Mivisa for its efficiencies and for remaining profitable through Europe's economic troubles: "These people have just maintained tremendous self-discipline."

In a note to investors, Bloomberg News reported, Philip Ng, an analyst at Jefferies Group L.L.C., wrote: "With investors' appetite for companies with leverage to a potential recovery in Europe, we view the acquisition as a positive for Crown's margin profile."

Crown shares rose 7.34 percent, or $2.98, to close Thursday at $43.60.

At the end of 2012, Crown was operating 149 plants in 41 countries and employing 21,856.

Conway told analysts that with the acquisition Crown would seek, by 2016, about $34 million in annual savings through efficiencies in supply chain and logistics.

But, he said, "we're not planning on shutting factories, moving plants; that is not part of our plan at all."

He also said he wants Mivisa managers who are selling their interests in the company to remain on the payroll.

"We've told them we want them all to stay," he said.

Citigroup Inc. will provide loans - $1.7 billion in new and refinanced debt - to fund the deal, Crown said.


CROWN HOLDINGS

$8.5B

in sales in 2012

149

plants in 41 countries in 2012

Makes

food and

aerosol cans


MIVISA ENVASES

$754M

in sales for

the year ended June 30

10

factories, including one

in Morocco

Makes

packaging for vegetables, fruit, fish, and meat


rkanaley@phillynews.com

215-854-5114

@ReidKan

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