Loews Corp (L) Closes Consolidated Container Buyout
Zacks Investment Research | May 22, 2017 11:29PM ET
Loews Corporation (NYSE:L) recently completed the buyout of Consolidated Container Company (“CCC”) enabling the Multi line insurer to further boost and diversify its operations and strengthen its network of manufacturing locations throughout the U.S. The company paid approximately $1.2 billion for the buyout, which has been funded by cash and debt equally. The transaction was announced on Apr 11, 2017.
Consolidated Container is an Atlanta-based rigid plastic packaging manufacturer, which offers packaging solutions for beverages, food and household chemicals. Notably, the packaging manufacturer will now become part of New York-based Loews Corp.’s newly formed business – Loews Packaging Group.
The addition of Consolidated Container will be a significant value addition to Loews Corp.’s already diverse portfolio. The buyout marks the company’s first foray into the packaging industry. The conglomerate’s other businesses include hotels, energy and financial services.
Loews Corp.’s decision to buy Consolidated Container was taken after careful analysis of the packaging industry for a considerable period of time. The Multi line insurer believes that Consolidated Container will be a perfect fit for its portfolio. Given that the packaging industry is highly fragmented without any major players and scope for solid cash flow generation, the company believes that the packaging manufacturer will not be subjected to any major technological disruption. Furthermore, Loews Corp. expects the latest transaction to accelerate its overall growth.
The buyout will offer Loews Corp. a platform for growth, organically and through prudent acquisitions. In addition, the company will be able to extend its services and improve the same, which will enable it to serve clients, more efficiently.
Share Price Movement
Shares of Loews Corp. lost 1.80% since the release of its first-quarter 2017 results, underperforming the Zacks categorized Zacks Investment Research
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