Alcoa Mulls Sale of Packaging Segment

Aluminum producer Alcoa Inc. said Wednesday it's considering the sale of its packaging and consumer businesses, which account for about 10 percent of annual revenue.  The company also said it's exploring strategic options for its electrical and electronics services unit, as well as its automotive castings businesses. Such a move typically includes considering a sale Chairman and Chief Executive Alain Belda said in a statement the packaging and consumer group's results are improving, but they "may provide more value on their own or as part of another company."

The segment generated about $95 million in operating income in 2006 on $3.2 billion in revenue, and employs about 10,000 workers in 22 countries. The group includes Alcoa's flexible packaging and consumer products units, as well as Closure Systems International and Reynolds Food Packaging. As for its electrical and electronics services unit and the automotive castings businesses, they together generated $1.6 billion in 2006 revenue and were "marginally profitable," the company said.  The electrical and electronic services unit was formerly known as the AFL wireharness business.

Alcoa shares jumped $1.98, or 5.8 percent, to $35.93 in morning trading on the New York Stock Exchange. Earlier in the session, they rose as high as $36.36, nearing their 52-week high of $36.96 set in May.

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