Rio Tinto has agreed to the sale of its Alcan Packaging Food Americas division for US$1.2 billion, the company announced in a statement to the Australian Securities Exchange.
The asset sale is part of a greater plan by Rio to reduce its debt level by divesting non-core assets.
Rio took on US$38 billion in debt when it bought Canadian aluminium maker Alcan in 2007.
According to Rio Tinto chief financial officer Guy Elliot, the asset sale is the first major move in a strategy to reduce the financial liabilities from Alcan.
“The sale of the Food Americas division is the first significant step in reducing the asset portfolio acquired with Alcan,” he said.
“The transaction represents solid value given the challenging financial environment.”
The sale comes on the back of US$3.7 billion in divestments Rio has announced so far this year.
The Alcan Packaging Food Americas division operates from 23 locations in the US, Brazil, Mexico, Argentina and New Zealand and generated revenues of US$1.5 billion in 2008, Rio said.