Orora Limited (ASX:ORA) announces sale of Orora Packaging Solutions (OPS) to Veritiv Corporation for A$1.775 billion, transforming the company's focus to beverage packaging.

Orora Limited (ASX:ORA) has entered into a binding agreement to sell Orora Packaging Solutions (OPS) to Veritiv Corporation for an enterprise value of A$1.775 billion. The sale is expected to result in net cash proceeds of approximately A$1.687 billion after tax, transaction costs, and purchase price adjustments. This strategic move aims to transform Orora into a focused beverage packaging business, leaving the company with a strong balance sheet and flexibility to pursue value accretive organic growth opportunities.

Executive Commentary on Sale of OPS

Orora's Managing Director & CEO, Brian Lowe, expressed that the sale of OPS to Veritiv marks a new era for Orora, accelerating the strategy of becoming a specialty value-added beverage packaging player. The sale is the culmination of a robust process and months of disciplined focus from the team to deliver a compelling outcome for Orora's shareholders. Lowe highlighted the strong balance sheet resulting from the sale, allowing the company to grow its beverage packaging businesses and further invest in high returning projects such as the expansion of the Rocklea cans facility in Queensland.

Summary of Sale and Outlook

The sale of Orora Packaging Solutions (OPS) to Veritiv for A$1.775 billion transforms Orora into a focused beverage packaging business, providing the company with a strong balance sheet and flexibility to pursue organic growth opportunities. Orora intends to reduce debt and invest in an organic Cans capacity expansion in Rocklea, Queensland. The company also aims to distribute surplus proceeds from the transaction to shareholders over time in a tax-efficient manner. Orora is committed to maintaining an investment grade credit profile while supporting its organic growth ambitions and is currently reviewing its capital allocation framework.