Aluminium giant Alcoa has agreed to sell its packaging and consumer businesses to New Zealand's Rank Group Limited for $2.7 billion in cash, it announced late last month.

The deal is expected to be completed by the end of the first quarter of 2008, according to a statement.

The privately owned Rank group has been rapidly expanding its packaging business in recent years. Last year it bought Swiss company SIG for $2 billion, and previously purchased International Paper's beverage-packaging unit for $500 million. This makes it the world's second largest beverage carton maker.

With the acquisition of Alcoa's consumer packaging units, Rank group will further increase its share of the food and beverage packaging market through its Carter Holt Harvey unit.

The deal includes Alcoa's Closure Systems business which makes plastic and aluminium closures and capping equipment and Consumer Products, a producer of Reynolds Wrap branded and private label foil, wraps and bags.

It also concerns the Flexible Packaging unit, a manufacturer of shrink labels and foil lidding, and Reynolds Food Packaging, which makes products for the foodservice sector, supermarkets and food processors.

The four businesses generated revenue of $3.2 billion in 2006, around 10 per cent of Alcoa's total revenues, but only 3 per cent of the group's after-tax operating income.

Alcoa had announced in April 2007 that it was looking at options for the segment and by October it said it had several buyers interested in the businesses.

The firm wants to focus on its higher value mining and aluminium businesses as demand and prices for the metal rise, thanks to strong demand from China and other emerging economies.

Rank group will aim to improve earnings from consumer packaging by leveraging its growing scale to increase efficiency and have greater control over pricing. Rank has operations across the world and employs about 17,000 people.

Alcoa will continue to operate its flat-rolled can sheet products for the packaging market.