Rexam, the global consumer packaging group and the world's leading beverage can maker, is pleased to announce that it has agreed to acquire FangXin Limited's beauty packaging business (FangXin) based in China for a cash consideration of US$74m (?42m) including borrowings assumed.
The acquisition is expected to be earnings enhancing from the outset. The transaction is expected to complete within the first quarter of 2006.
FangXin manufactures lipstick cases, compacts and pumps as well as mascara cases. In the last four years, its sales have grown at a compound growth rate of about 30% per annum. Since 2003, FangXin has invested heavily in new facilities and has the capacity to further increase sales. In 2005, it is estimated that FangXin broke even on sales of US$33m (?19m) and, at year end, had net operating assets of US$69m (?39m).
Rexam has had a presence in China since 1998, where, following the acquisition, it will have nine Plastic Packaging plants serving the beauty industry and one beverage can plant.
Commenting on the acquisition, Lars Emilson, Rexam's Chief Executive said: "This is a further step in the execution of our strategy to expand in plastic packaging. The Chinese beauty packaging industry is becoming increasingly important globally. The acquisition of this well invested company broadens our product range and provides us with new capabilities that will further improve our customer offering."
