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O-I mulls divestiture of remaining plastics

Glass and plastics packaging processor Owens-Illinois Inc. (O-I; Perrysburg, OH) has retained Goldman Sachs & Co. as a financial advisor as it considers divestment of its remaining plastics operations. For the 12 months ending Sept. 30, 2006, O-I Plastics had revenue of approximately $770 million, only about 11% of the firm’s total revenue. O-I Plastics has two divisions, HealthCare Packaging and Closure & Specialty Products, with facilities in the U.S., Mexico, Brazil, Hungary, and Singapore.
O-I once was a widely diversified firm with operations running from paper and corrugated packaging to the operation of nursing homes, and many businesses in between. In1987 Kohlberg Kravis Roberts & Co. (New York) acquired the business and began selling many of its operations, including 31 bottle blowmolding operations to Graham Packaging (York, PA) in 2004 for $1.2 billion.
According to a source within O-I, who wished to remain anonymous, company executives expect the process to take between 3 and 6 months, with some indication that the business will be sold together and maintain its location. There was no initial indication of whether the buyer would be strategic or financial. Executives had held out hope of retaining the business if sales volumes were doubled, putting that challenge to employees, according to the source, but ultimately that lofty goal went unachieved.
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