Orora Sells North American Business for AU$1.78 Billion

Orora sharpens focus on Australian operations and debt reduction

Highlights:

• Strategic Sale: Orora Limited (ASX: ORA) sold its North American Packaging Solutions unit to Veritiv for AU$1.78 billion, focusing on core Australian operations.
• Shareholder Value: Orora's shares surged 6% following the sale announcement, with plans to return part of the proceeds to shareholders in a tax-efficient manner.
• Expansion Investment: Orora will invest AU$130 million to expand its can manufacturing plant in Queensland, increasing capacity by 13% by 2026-27.

Streamlining Operations with Strategic Sale

Orora Limited (ASX: ORA), a leading manufacturer of glass bottles and cans, announced the sale of its North American Packaging Solutions unit to Veritiv Corporation for AU$1.78 billion. This strategic move allows Orora to reduce its debt and concentrate on its core business in Australia. The sale comes as Orora shifts its focus to specialized manufacturing, shedding non-core assets to strengthen its market position.

Orora’s Shares Surge on Announcement

Following the news, Orora's shares rose by 6% to AU$2.65, reflecting investor confidence in the company’s streamlined approach. CEO Brian Lowe emphasized that the sale will accelerate Orora's transformation into a more focused and robust business. The company plans to use part of the proceeds to expand its can manufacturing plant in Rocklea, Queensland, with a AU$130 million investment that will increase capacity by 13% by 2026-27.

Capital Management and Shareholder Returns

In addition to operational expansion, Orora intends to return some of the sale proceeds to shareholders in a tax-efficient manner. While the specifics of the capital management plan are yet to be finalized, this move is expected to enhance shareholder value. The sale also comes after Orora rejected a buyout bid from US private equity firm Lone Star, which offered AU$2.55 per share in mid-August.

This transaction underscores Orora’s commitment to building a stronger, more focused business, with a clear emphasis on maximizing returns for shareholders and investing in high-growth areas.

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