(Reuters) - Soda can maker Ball Corp (BLL.N) said on Thursday it plans to sell its manufacturing facilities in China for about $225 million following an excess supply of beverage cans in the country.
The company — which makes cans for Coca-Cola Co (KO.N), Anheuser Busch Inbev NV (ABI.BR) and Molson Coors Brewing Co (TAP.N) — plans to sell the can-making facilities to Chinese metal packaging company ORG Technology Co Ltd 002701.SZ.
“Excess industry capacity in China has led to unsustainable business conditions and inadequate returns on capital deployed relative to Ball’s expectations,” company spokeswoman Renee Robinson told Reuters.
Following the completion of the transaction, Ball’s contracts in China will transfer to ORG Technology.
The sale was unrelated to tariffs on aluminum or trade tensions between the United States and China, Robinson added.
GoPro Inc (GPRO.O) said earlier this week it planned to move most of its U.S.-bound camera production out of China by the summer of 2019 to counter the potential impact from any new tariffs.
Ball’s cans that are manufactured in China are not exported to other countries.
The company said proceeds from the sale of assets and plants in Beijing, Foshan, Hubei and Qingdao will support its global expansion and multi-year share repurchase program.
Goldman Sachs & Co served as Ball’s financial adviser.
Reporting by Uday Sampath in Bengaluru; Editing by Shounak Dasgupta