11 Mar 2004
Sonoco enters into agreement with Italian-based Demolli
Hartsville, S.C.. March 4, 2004, -- Sonoco (NYSE: SON), the global packaging company, has entered into a put/call agreement with the majority shareholders of joint venture partner Demolli Industria Cartaria S.p.A., an Italian-based manufacturer of paperboard and engineered carriers, it was announced today by Harris E. DeLoach, Jr., president and chief executive officer.
Under the agreement, Demolli will be able to require through a put option arrangement that Sonoco buy the remaining shares in Demolli that it does not currently own at any time through December 2006. The agreement also gives Sonoco the right, at its discretion, to purchase the remaining shares in Demolli through a call option arrangement at any time after December 2006 through December 2009. Sonoco currently owns 25 percent of Demolli, a position it has held since 1995. The price of the shares purchased will be determined by a predetermined formula, which Sonoco believes to approximate fair value, related to an earnings multiple at the time such shares might be put or called.
"This agreement is a continuation of Sonoco's overall growth strategy which includes acquisitions and joint ventures in addition to organic growth encompassing new product and market development, extensions of existing technologies and geographical expansion," said DeLoach. "Demolli and its principal, Carlo Ripamonti, have been excellent partners since forming our joint venture in late 1995. We are delighted to complete this agreement that further enhances our outstanding relationship," added DeLoach.
Demolli, with annual sales of approximately $80 million, is Italy's largest manufacturer of tubes and cores and a major manufacturer of recovered paperboard, serving markets in Italy and northern Europe.
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Sonoco Europe S.A.
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Notes for editors
Sonoco, founded in 1899, is a $2.8 billion global manufacturer of industrial and consumer products and provider of packaging services, with approximately 295 locations in 32 countries, serving customers in 85 nations. Additional information about the Company is available at www.sonoco.com.
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Information about the Company's use of non-GAAP financial measures, why management believes presentation of non-GAAP financial measures provides useful information to investors about the Company's financial condition and results of operations, and the purposes for which management uses non-GAAP financial measures is included in the Company's 2002 Annual Report on Form 10-K filed with the Securities and Exchange Commission. Additional information concerning some of the factors that could cause materially different results is included in the Company's reports on forms 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission. Such reports are available from the Securities and Exchange Commission's public reference facilities and its Web site, the Company's investor relations department and the Company's Web site, www.sonoco.com.
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James A. Harrell, III
Sonoco Europe S.A.
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