- Packaging company Orora will sell its Australasian fibre company to Nippon Paper for $1.7 billion
- Nippon is a world-leading paper company, based in Japan
- Following the sale, Orora will focus on its beverage and packaging businesses in Australia and the U.S.
- The company hopes to drive future growth and cash flow
- Orora’s share price has gained 15.6 per cent today, with shares trading at $3.16 each
Orora has announced the sale of its Australasian Fibre Business to Nippon Paper Industries for $1.72 billion.
Orora is an industry-leading packaging solutions company who listed on the Australian Securities Exchange in 2013. Since listing, the fibre business has been an important part of Orora’s growth.
Its Australasian Fibre Business includes the B9 Paper Mill, fibre converting, specialty packaging, cartons, bags, functional coatings and Orora WRS packaging distribution.
Company Chairman Chris Roberts has stated the sale is in the best interest of its shareholders.
“The Nippon Paper offer represents compelling value for shareholders, reflecting a full price for the Australasian Fibre Business which has reached maturity under Orora ownership and which will now benefit from the synergies and other value enhancements available to Nippon Paper as a strategic acquirer,” Chris said.
The company is pleased to see the Fibre team join Nippon Paper, which is one of the world’s largest forest, paper and packaging companies.
“Today’s announcement represents an exciting new era for both Orora and the Fibre business as it transitions to Nippon Paper,” Orora CEO and Managing Director Brian Lowe said.
Previously, Nippon Paper has spent millions on acquiring similar companies, however the purchase of Orora’s fibre business will be its largest investment outside Japan.
Moving forward, Orora intends to direct its focus on its Australasian beverage business, and businesses in North America.
Its beverage business is a leading supplier of aluminium cans and glass bottles, and manufactures roughly 65 per cent of Australia’s wine bottles.
Orora’s North American businesses include Orora Packaging Solutions (OPS) and Orora Visual (OV).
OPS is a top five company in the US$50 billion packaging distribution market, while OV is a top five company in the US$10 billion point of purchase and visual displays market.
The company aims to grow these businesses through leveraging products, services and a nationwide footprint.
Since news of the sale, Orora’s share price has gained 15.6 per cent today, with shares trading at $3.16 as at 12:25 pm AEDT.