By Arno Schuetze and Soyoung Kim
FRANKFURT/NEW YORK, Nov 15 (Reuters) - U.S. packagingcompanies Berry Plastics Group Inc and Silgan HoldingInc as well as German peer Gerresheimer arecompeting to buy the healthcare packaging unit of Rexam in a deal expected to fetch a little less than $1 billion,people familiar with the matter said.
Rexam, which is selling the healthcare unit to focus on itscore business of making beverage cans, received second-roundbids earlier this week from the industry rivals, the people saidon Friday.
Private equity firms including Bain Capital LLC and KKR & CoLP also put in offers, two of the people said,requesting anonymity because details of the process are notpublic.
Rexam, Gerresheimer, Bain and KKR declined to comment, whileBerry Plastics and Silgan did not immediately respond torequests for comment.
Rexam said in June that it would sell its healthcarebusiness, which makes medical packaging and drug deliverydevices such as bronchial inhalers and injection syringes andaccounts for about 10 percent of group sales.
The company expects to announce a deal by year-end or earlynext year, Chief Executive Officer Graham Chipchase told Reuterson Thursday.
The healthcare unit was initially expected to fetch about650 million pounds, or $1 billion, but some of the bidders arenow valuing it at closer to 550 million pounds, or $885 million,the people said.
Gerresheimer had withdrawn from the auction race, but cameback with an offer after Rexam signalled it would accept a lowervaluation, two of the people said.
"It is a very heterogeneous business comprising a low-growthcash machine, a unit with a good product pipeline but in heavyneed of investment and a turnaround case," a third source said.
A successful sale of the healthcare division would followthat of Rexam's underperforming personal care business in Julylast year, which makes packaging for cosmetics and toiletries,for $709 million in two parts.
Private equity firm Sun Capital Partners agreed to buy thecosmetics, toiletries and household care division for $459million, while Silgan Holdings acquired the high-barrier foodpackaging business for $250 million.
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