Rio Tinto (LSE, ASX: RIO) said it completed the sale of certain divisions of Alcan Packaging to Amcor (ASX: AMC) for US$1.9bn this week. The disposal of Alcan's global Pharmaceuticals, global Tobacco, Food Europe and Food Asia divisions was initially agreed in August 2009.
"The completion of this complex transaction is another significant step in the recapitalisation of our balance sheet. Since the start of 2009 we have completed divestments of US$5.6 billion despite a difficult environment created by the global financial crisis”, said Rio Tinto chief financial officer Guy Elliott, “These proceeds, together with the proceeds from our successful rights issues and strong underlying cash flows, provide us with the flexibility to pursue value adding investment opportunities as they arise".
The initial deal was for US$2.025bn and also included the Medical Flexibles business, the disposal of which has been delayed by an ongoing detailed market review by the US Department of Justice.
Since February 2008, the international mining and metals group has been actively disposing of its non-core assets and operations. Rio Tinto completed divestments totalling US$3.1 billion in 2008 and agreed asset sales of US$7.2 billion in 2009, of which US$3.6 billion have now been completed.
Rio Tinto's core business is the mining and processing of mineral resources. Its major products are aluminium, copper, diamonds, coal, uranium, gold and industrial minerals such as borax, titanium dioxide and iron ore. The company is strongly represented in Australia and North America, with significant businesses in South America, Asia, Europe and southern Africa.
Disclosure: The author holds no positions in the company