Business Context and Reporting Period
Company: Crown Holdings, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: August 31, 2014
Event: Entry into a Material Definitive Agreement to acquire EMPAQUE (FAMOSA B.V., SIVESA B.V., and SISA Mexico B.V.), a Mexican manufacturer of aluminum cans, ends, bottle caps, and glass bottles.
Key Financial Metrics
- Transaction Value: Enterprise value of $1.225 billion in cash (subject to adjustment).
- Financing Structure:
- Debt financing commitments obtained from Citigroup Global Markets Inc.
- Amendment to existing senior secured credit agreement to permit up to $750 million in additional term B loans.
- New facilities to mature on the seventh anniversary of the closing date.
- Balance of purchase price to be funded via available cash, additional borrowings, or other means.
- Operational Impact: Affiliates of Heineken N.V. will enter into long-term supply agreements with EMPAQUE for aluminum cans, bottle caps, and glass bottles upon closing.
Note: This filing does not provide specific revenue, profit, cash flow, margin, or existing debt figures for Crown Holdings, Inc. or the target company.
Material Changes and Transaction Details
The primary material change is the execution of the Stock Purchase Agreement with Heineken International B.V. and affiliates. The transaction is not subject to a financing condition. The Company has agreed to take all steps necessary to avoid or eliminate impediments under competition law.
Guidance, Risks, and Contingencies
Closing Conditions: The transaction is subject to several regulatory and legal conditions, including:
- Approval under the Ley Federal de Competencia Económica from the Mexican Antitrust Authority.
- Approvals from antitrust regulators in certain other jurisdictions.
- Approval by the Mexican Foreign Investment Commission.
- Absence of any restraint by governmental authorities.
- Accuracy of representations and warranties and compliance with covenants.
Termination Rights: The agreement may be terminated by mutual agreement, material breach, governmental restraint, or by either party upon notice after August 31, 2015.
Investor Verification Checklist
- Verify the status of regulatory approvals, specifically from the Mexican Antitrust Authority and the Mexican Foreign Investment Commission.
- Confirm the final purchase price adjustments and the specific mix of cash versus debt used to fund the transaction at closing.
- Monitor the execution of long-term supply agreements between EMPAQUE and Heineken affiliates.
- Review the amended senior secured credit agreement terms regarding the $750 million term B loans.