Amcor buys South America's Alusa for $567m

Amcor has acquired South America's flexible packaging market leader Alusa for US$435 million ($A567 million) from owners Techpack SA and Nexus Private Equity.

The news comes three months after Amcor announced plans to buy California-based flexible packaging company Deluxe Packaging for US$45 million and 10 months after it created a new Americas flexible packaging unit.

It is Amcor's largest acquisition since it paid US$1.9 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 five per cent share of flexible packaging in the Americas.

The latest acquisition, which includes Alusa in Chile, Peruplast in Peru, Aluflex in Argentina and Flexa in Colombia, will boost Amcor's market share by eight per cent and increase annual sales by US$375 million.

The Deluxe purchase boosted revenues by about US$42 million.

Amcor chief executive Ron Delia (pictured), who took over from Ken Mackenzie in 2015, has made growth in South America a priority to better service customers such as Kraft, Nestle, Pepsico and Unilever, who are growing rapidly in the region.

Delia said the purchase price represented a multiple of 8.5 times profit before interest tax depreciation and amortisation of US$51.2 million.

Amcor expects Alusa's profits to reach $US65 million within three years, underpinned by synergy benefits of US$25 million and market growth, delivering a return on investment (after cash costs) of 15 per cent. Return on investment is expected to reach 20 per cent by the end of year five.

Amcor has made almost 20 acquisitions over the past five years in its core markets of rigid plastics, flexible packaging and tobacco packaging.

Each has delivered at or above its benchmark return on investment of 20 per cent.

Alusa makes flexible packaging for the food, personal care and pet food markets and has four plants and a broad range of capabilities including film extrusion, flexographic and gravure printing, and lamination.