Chile’s Luksic Group‘s Quiñenco SA (BCS: QINENCO) conglomerate, is said to be exploring further strategic alternatives after the sale of its packaging business Alusa, a subsidiary of Tech Pack SA (BCS: TECHPACK) two weeks ago, to Australia’s Amcor Holdings (ASX: AMC) for US$435 million.
With a market capitalization of over US$20 billion and aggregate assets of over US$60 billion, the Luksic Group is one of the largest business conglomerates in Chile.
On Friday, Tech Pack shares closed on Chile’s Bolsa de Comercio de Santiago (BCS) at 343 CLP (Chilean Pesos), giving the company a total market value of approximately 127.76 bn CLP (US$194.9 million). Quiñenco closed at 1,300 CLP with a market capitalization of 2.16 tn CLP (US$3.27 billion).
A unit of the Luksic Group has reportedly engaged Citigroup (NYSE: C) to explore strategic alternatives, according to Bloomberg, but the nature of the businesses or breakdown of the assets being shopped were not disclosed.
Amcor’s recent purchase price of Alusa, the largest flexible packaging business in South America, represented 8.5x PBITDA, Amcor said. The deal included Alusa (Chile), Aluflex (Argentina), Peruplast (Peru) and Flexa (Colombia). Peruvian private equity firm Nexus Group co-owned 50% of Alusa’s units in Peru and Colombia.
Alusa is the largest flexible packaging manufacturer and supplier in Chile and Peru, and a leading participant in Colombia and Argentina, with one plant in each of these four countries. The sale is subject to approval by Techpack shareholders and relevant regulatory authorities. The closing is expected in the coming months, said Amcor.
Amcor’s acquisition came three months after it announced plans to buy California-based flexible packaging company Deluxe Packaging for $US45 million and 10 months after Amcor created a new Americas flexible packaging unit, said The Sydney Morning Herald. It represents Amcor’s largest acquisition since the global packaging group paid $US1.9 billion for Alcan’s consumer packaging operations in 2009. Amcor is a global leader in flexible packaging and has strong market share in European and Asian markets, ranging from between 15 per cent and 25 per cent, but had less than 5 per cent share of flexible packaging in the Americas.
Tech Pack SA
Techpack is the leading flexible packaging provider in Latin America via its subsidiaries Alusa, Peruplast, Aluflex and Flexa. The company operates five plants in Chile, Peru, Colombia and Argentina, with a total capacity of 80 thousand tons per year.
Techpack was established in April 2013 as a result of the restructuring of Madeco SA, a diversified industrial conglomerate originally founded in 1944.
Quiñenco, founded in 1957, is one of the largest and most diversified business conglomerates in Chile. It manages assets of approximately US$70.6 billion, controlling leading companies in the financial, food and beverage, manufacturing, energy, transport, shipping and port services sectors, which altogether employ approximately 69,000 people in Chile and abroad. In 2014, the aggregate sales of the main operating subsidiaries and affiliates in which Quiñenco participates amounted to more than US$19.8 billion.
The Luksic family, ranked by Forbes as the 4th richest family in Latin America in 2014, owns 81% of Quiñenco’s shares. Andrónico Luksic Craig, the eldest son of Andrónico Luksic and Ena Craig, became chairman of Quiñenco in 2013.
The Luksic Group
Founded by the late Andrónico Luksic Abaroa (1926-2005) in the 1950´s in Antofagasta, Chile, the Luksic Group’s initial activities were primarily related to copper mining, the country’s most important natural resource.
In the 1960s the Luksic Group expanded to metal processing, power distribution, manufacturing, transport, agriculture, fishing, food processing and forestry. In the 1970s the group expanded to Argentina, Colombia and Brazil, into sectors such as metal manufacturing, agriculture and car dealing.
In the 1980s the group diversified into telecommunications, banking, food and beverage, hotels and railways. It also acquired control of Ferrocarril de Antofagasta a Bolivia, a company incorporated and listed on the London Stock Exchange since 1888, which was renamed Antofagasta Holdings (LSE: ANTO).
In 1996 the group reorganized its ownership structure, whereby Antofagasta Holdings transferred its banking and industrial interests to Quiñenco SA, another diversified Chilean company controlled by the Luksic family, with mining and railway investments remaining under Antofagasta plc. This opened the door to capital markets for Quiñenco, while Antofagasta moved ahead with the Pelambres and Tesoro mines.
Antofagasta plc (LSE: ANTO) is currently one of the world’s major international copper producers with its activities concentrated mainly in Chile where it operates four copper mines: Pelambres, Tesoro, Michilla and Esperanza. The company is 65% owned by the Luksic family.
In recent years Quiñenco has reorganized its portfolio of industrial and financial investments, divesting minor and less profitable investments, while globalizing its activities.
The Luksic Group is currently engaged in mining, railway, transport, energy, port and shipping services, financial services, food and beverage, manufacturing and tourism.
Photo: Andrónico Luksic Craig, Chairman of Quiñenco SA.