Packaging manufacturer Cargal Ltd. (TASE: KRGL.B1) is making its second acquisition in as many months. The company today signed a letter of intent to acquire Amraz Ltd. for NIS 275 million.
Amraz will also pay a NIS 200 million dividend when the deal is closed. The company promised that the dividend will not affect its repayment of loans. If the dividend is less that NIS 200 million, the difference will be added to the price tag;
The companies have 60 days to reach a contract, and Cargal expects to complete the deal by the end of the year.
Amraz manufactures plastic packaging and finished products from a wide range of thermoplastic raw materials. The company has two plants in Israel, at Rishon LeZion and Ashdod, and a third plant in Romania. The company exports to over twenty countries worldwide.
Amraz's customers include international and Israeli brands, such as Coca-Cola, Pepsi, Nestle (SWX:NESN), Uniliver, Danone, Yoplait, IKEA Israel, Keter Plastics Ltd., juice producers Jaffora-Tavori and Prigat, bottled water companies Eden Springs Ltd. (Maayanot Eden) (TASE: MEYD) and Neviot - Nature of Galilee Ltd. (TASE: NVIO), and food producers Osem Investments Ltd.) (TASE: OSEM), Strauss Group Ltd. (TASE:STRS), and Tnuva Food Industries Ltd.
In late May, Cargal subsidiary Plasto Sac Ltd. (TASE:PLST) signed an agreement to acquire rival polypropylene packaging manufacturer Salina Industries (1972) Ltd. from its founders for NIS 30 million.
Given that Amraz is in the same business as several Cargal subsidiaries, the Antitrust Authority will have to approve the merger.
Published by Globes [online], Israel business news - www.globes-online.com - on July 8, 2010
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