Alcoa Inc. said Friday it agreed to sell its packaging and consumer businesses to New Zealand's Rank Group Limited for $2.7 billion in cash. The move is the latest by the world's third-largest aluminum producer to focus on its core business. Alcoa, New York-based but with a major presence in Pittsburgh, said packaging and consumer businesses generated about $3.2 billion in revenue and $95 million in after-tax operating income in 2006, representing 10 percent of Alcoa's revenue and 3 percent of its after-tax operating income. The assets to be sold have about 10,000 employees in 22 countries and include Reynolds aluminum wrap among other consumer brand names, the company said. The packaging business includes a former Reynolds plant in Grove City, Mercer County, that employs 200 people. "This will not have any effect on employment in the Pittsburgh area," said Alcoa spokesman Kevin Lowery. The Rank Group is a private company that employs 17,000 people worldwide through Carter Holt Harvey, SIG Holding, Evergreen Packaging and others. "The company sent an e-mail to employees yesterday afternoon welcoming them to the company and explaining its reasons for its purchase," Lowery said. "We will endeavor to have a minimal impact on employees during the transition period," the e-mail said. The note said the acquisition fits well with Rank Group's packaging assets, Lowery said. "They think their plan is to call it the Reynolds Packaging business. They think it's going to give them a great, strong foothold here in North America," Lowery said. "They've already got some, but this is going to be a big piece." Over the last several months, Alcoa has been divesting what it has deemed underperforming assets that did not fit with the company's long-term corporate view for boosting profits. The company will retain its flat-rolled can sheet products business -- used to make soda cans. Investment bank Lehman Brothers served as financial adviser on the transaction, according to Alcoa, which said in October it had identified buyers for the packaging and consumer businesses. The assets that Alcoa is disposing of include Closure Systems International, a maker of plastic and aluminum packaging closures and capping equipment for beverage, food and personal care customers. It also is selling its Reynolds Wrap branded and private label foil, wraps and bags business, and its flexible packaging unit. That unit makes laminated, printed and nonrigid packaging materials such as pouch, blister packaging, shrink labels and foil lidding for the pharmaceutical, food and beverage, tobacco and industrial markets. Alcoa in September sold its stake in Aluminum Corp. of China Ltd. for $2 billion, notching a $1.8 billion gain on an investment. Alcoa is restructuring its automotive electronic and electrical businesses, a spokesman said. The transaction announced yesterday is expected to be completed by the end of the first quarter of 2008. Alcoa, which has been a rumored takeover target amid a wave of consolidation in the global mining industry, has said the divestitures would help it focus on mining bauxite and producing alumina, which is manufactured into aluminum. Shares of Alcoa rose 96 cents, or 2.7 percent, to close at $36.35 on the New York Stock Exchange. So far this year, the stock has climbed 21 percent, compared to an 8 percent increase in the Dow Jones Industrial Average, of which Alcoa is a component. Reuters, Associated Press and staff writer Ron DaParma contributed to this report.

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