Page last updated at 07:17 GMT, Wednesday, 23 December 2009

Rio Tinto accepts $2bn offer for Alcan units

Cans made by Amcor
Rio Tinto bought Alcan two years ago

Mining giant Rio Tinto has formally accepted a $2bn (£1.3bn) offer by Australian firm Amcor for four units of its Alcan Packaging businesses.

Amcor is buying Alcan's tobacco and drugs packaging units, and its European and Asian food packaging arms.

The offer was made on 18 August and has been cleared by the European Commission.

Rio Tinto bought Alcan in 2007, but was forced into the sale in order to reduce its heavy debt burden.

The deal still has to be cleared by US regulators before it can be finalised.

High debts

Earlier this year, Rio said it had agreed to sell Alcan's American food packaging business for $1.2bn to US company Bemis.

Analysts said the problem for Rio was that it paid too much for Alcan, buying the firm when global metal prices were at record highs.

It had to build up significant debts to fund the $38bn deal.

Now it is focusing on reducing its debts. It has raised $10.3bn from selling assets since the beginning of last year, and raised $15.2bn in July through a share issue.

The Alcan divisions being sold employ about 14,000 staff at 80 locations in 28 countries.

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