Business & Finance

Amcor to Sell 50% Investment in Kimberly-Clark Australia

May 8th, 2001

Amcor announced today that it has reached agreement with Kimberly-Clark Corporation (KCC) for the sale of its 50% investment in Kimberly-Clark Australia (KCA) to KCC.

The price agreed for Amcor's 50% holding is $775 million. This compares with the book value as at December 31, 2000 of $163 million.

The terms of the agreement are that Amcor will sell an initial 5% of KCA to KCC prior to June 30, 2001. Amcor will have a put option on the remaining 45% of KCA, exercisable in minimum parcels of 10% over the next two years. KCC has a two year call option after year two for the balance it does not own.

Russell Jones, Amcor's Managing Director said: "Amcor's objective is to become a focused packaging company, operating globally and KCA does not form part of our long-term strategy. The timing is now right, from a strategic perspective, to create the opportunity to better re-invest the funds currently employed in KCA.

"A key benefit of the sale agreement is the financial flexibility it gives Amcor. We can exercise our put option over a two year period, enabling us to confidently pursue strategic acquisitions knowing that funding is available. In the meantime, we continue to enjoy the excellent returns that KCA delivers.

"The after tax proceeds will be around $750 million. The re-investment of these funds at an appropriate level of gearing and achievement of a 15% PBIT return has the potential to deliver significant earnings growth for our shareholders."

Mr Jones added: "Amcor's relationship with KCC dates back to 1963 and the investment in KCA has been both harmonious and extremely rewarding over that period."

This sale is subject to the approval of the Foreign Investment Review Board.