Rexam is to buy Egyptian can maker Ecano in a deal worth US$107m.

The packaging company said today (3 February) that it had agreed to buy Ecano from a group of private shareholders.

The acquisition, which is subject to the approval of the Cairo and Alexandria Stock Exchange, will be earnings enhancing from the outset and is expected to meet Rexam's cost of capital from 2007, the company said. It is anticipated that the transaction will complete shortly.

Ecanco is the sole beverage can maker in Egypt. Its plant, located just outside Cairo, comprises a single line for steel beverage cans. Most of its cans are sold locally, with the balance exported to North Africa and the Middle East. The company's major customers are Pepsi and Coca-Cola.

For the financial year 2005, Rexam estimated that Ecanco had sales of US$41m and, at 31 December 2005, net operating assets of US$27m.

"Our strong presence in countries such as Brazil, China, Russia and now Egypt, means that emerging markets account for around 20% of our turnover," said Lars Emilson, Rexam's chief executive.