RJ Reynolds Tobacco Company and RJR Packaging have sold the assets and business of RJR Packaging to five companies for US$48.2M in a deal which will see the purchasers enter into long-term tobacco packaging supply agreements with RJ Reynolds.
Alcan Packaging Food and Tobacco Inc has acquired RJR Packaging's printed packaging activities, including carton, box and label production; Alcoa Flexible Packaging LLC, its cigarette foil and inner frame business; Southern Graphic Systems its cylinder engraving and prepress services; Mundet Inc, the company's tipping and low-ignition propensity paper operations; and Oracle Flexible Packaging Inc, its "external" packaging business and RJR Packaging's two main facilities in Winston-Salem, North Carolina.
Alcan immediately announced that, having signed an exclusive packaging supply agreement with RJR Tobacco, it will build a greenfield production plant close to RJR Tobacco's factory to supply it with folding cartons and labels.
"The sale represents an opportunity for the packaging business to maximise its potential by partnering with leaders in the industry," added Jeffrey Eckmann, executive vice president of strategy, integration, and information technology and business development for RJ Reynolds' parent company, Reynolds American. "These companies have a long-term interest in growing that business, whereas RJ Reynolds' focus is on growing its cigarette business."
RJ Reynolds Tobacco Company is America's second largest tobacco producer, making about one in three cigarettes sold in the US.