Packaging group Bunzl, which supplies food packaging to the European market, is cutting its historic links with the paper industry, under a deal to offload its paper distribution business to Australian firm PaperlinX, according to a report in the Birmingham Post.
Bunzl, which is based in the UK, said the £138.8 million deal was the last step of a strategy to reduce its commitment to paper and channel resources into higher growth businesses.
Chairman Anthony Habgood said: '"While paper distribution represented only seven per cent of group operating profit in 2001, this disposal marks an important stage of Bunzl's evolution representing a final break with the paper industry with which Bunzl has been associated for over a hundred years."
Bunzl has been transforming itself in the 1990s, concentrating on outsourcing services and plastic packaging.
The business being sold has branches in the UK including Leicester and Nottingham.
Last month, however, Bunzl said the division was recovering from tough market conditions.
The £138.8 million deal is made up of £64. million cash, £56.7 million borrowings and £18 million deferred cash payment.
The company also stated that while the growth of its plastics division -- which largely serves the food packaging industry - was slow, sales figures were still up on the same period last year.
Bunzl releases its full year trading figures on August, 27.