Illinois Tool Works is expected to announce later this afternoon a $3 billion deal to sell its industrial packaging unit, according to people briefed on the matter.
The Carlyle Group is the likely buyer, these people said. But another private equity firm, Onex, has also been in late negotiations on the deal. Onex is said to be working with the Canadian Pension Plan Investment Board.
Carlyle has experience carving out units from large industrial conglomerates. Last year, Carlyle paid $4.15 billion for the diagnostics unit of Johnson & Johnson. And in 2012, the firm agreed to pay $4.9 billion for DuPont’s performance coatings unit.
Illinois Tool Works started a process to sell its packaging business in September, these people said. The business produces a range of products used in shipping and transportation, but is viewed as noncore to Illinois Tool Works, which makes automotive and construction products. Shares in Illinois Tool Works were up slightly to $78.08 in late trading on Thursday.
A deal is expected to be announced after market’s close on Thursday. Reuters earlier reported that the deal was in its final stages.
