Rexam, a UK-based beverage can maker, has entered into a deal to purchase 51% stake in beverage can maker United Arab Can Manufacturing (UAC) for $122m.

Located in Dammam, Saudi Arabia, UAC has annual production capacity of 1.8 billion beverage cans in both standard and specialty sizes.

An approved supplier of Coca-Cola, UAC produces aluminium beverage cans and can ends, and offers its products to Coca-Cola plants, and other juice and carbonated beverage producers.

Following the completion of the deal, the trade name will be changed from UAC to Rexam UAC, while all the current shareholders, including Olayan Financing Company, Aujan Industries, The Coca-Cola Bottling Company of Saudi Arabia and Al-Jabr Trading Company will be retained.

Rexam CEO Graham Chipchase said, "We have spoken for some time about the opportunities in emerging markets and I am delighted that we are seeing our strategy bear fruit with the acquisition of a controlling stake in United Arab Can."

"While the plant is operating well, given our own global scale and technical expertise, we see a number of opportunities for synergies," Chipchase added.

"Growth prospects for the beverage can in the Middle East are attractive and we look forward to working together with our partners in UAC to lead further expansion in the region."

The deal, which is subject to regulatory approvals, is expected to close in the third quarter of 2014.

Image: The beverage cans developed by Rexam are used for beers, carbonated soft drinks, energy drinks, iced tea, juices and other beverages. Photo: courtesy of Rexam PLC.