In November last year, the group signed separate agreements to divest its tobacco packaging and all of its Russian operations to the Austrian cartonboard manufacturer Mayr-Melnhof (MM) for approximately Euro 100 million ($137 million) and its specialties packaging operations to the German supplier of composite cans, composite drums and rigid plastic containers Weidenhammer Packaging. Advanced negotiations based on a signed letter of intent were also ongoing on its food packaging operations.
"Due to the failed sale of the tobacco business the divestment process has been cancelled," ÅR Packaging said. The group's president and CEO Harald Schulz rejected market reports that ÅR Packaging's challenging financial situation was the main reason behind the cancellation. "Our fact-based view is that we were suddenly faced with a buyer who showed no interest in closing the deal after signing the SPA [share purchase agreement] and especially under the SPA (binding) conditions," he said.
MM, for its part, said only that it was not closing the deal due to "changed circumstances." "Conserving value for our shareholders remains a priority also throughout the consolidation," said MM management board chairman and CEO Wilhelm Hörmanseder.
In parallel, ÅR Packaging has ended the divestment negotiations regarding its specialties packaging and food packaging operations. "The sale of the tobacco business was always the starting point. Without this deal, for a number of reasons, the other deals have not been able to close too," Schulz told PPI Europe.
ÅR Packaging's shareholders have therefore decided to continue as shareholders of the ÅR Packaging Group with the aim of further developing the firm. "Concrete actions to further strengthen the group will be implemented," ÅR Packaging said, without elaborating.
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