The maker of cans for White Claw strikes an $8.5 billion spinoff deal.

The company, which makes the aluminum cans used by LaCroix, White Claw, and other beverage makers, is spinning off that business into a deal that valued the new company at $ 8.5 billion, according to several people with knowledge of the plan.

The deal by the Ardagh Group based in Luxembourg, This would take the form of a merger with a special purpose acquisition vehicle (SPAC) backed by a subsidiary of the Gores Group, the California-based private equity firm. It could be announced as early as Tuesday, said people, who spoke on the condition that they are not named because the negotiations are confidential.

It’s a bet on the canning business to continue growing as companies increasingly weigh the environmental impact of their products. Nestlé announced the sale of its water business for $ 4.3 billion this month, in part to deviate from the plastic-wrapped water. Aluminum cans are much easier to recycle than plastic bottles.

The Gores SPAC, named Gores Holdings V, is the seventh deal in this group.

Ardagh will retain an 80 percent stake in the company after the deal. Investors are contributing a $ 600 million private placement while Gores is putting $ 525 million in cash. The new company, Ardagh Metal Packaging, will issue $ 2.65 billion in new debt.

Ardagh generates more than half of its annual sales of around 7 billion US dollars from the manufacture of cans for beverage manufacturers. Last year, the unit’s revenue increased 2 percent due to beverage sales and environmental awareness, while earnings before interest tax amortization and amortization increased 8 percent. Ardagh will continue its glass packaging business.

For beverage manufacturers, cans have become an increasingly important tool for branding and offer colorful and elegant packaging.

When Ardagh acquired its canning operation for $ 3 billion in 2016, Ardagh was doing most of its business with well-known brands such as major soda and beer companies. Since then, the company has partnered with younger and faster growing selters-based brands such as White Claw, LaCroix and Truly Hard Seltzer to drive growth. To prepare for further anticipated expansion in the US, the company bought a factory in Huron, Ohio.

Globally, the company is aiming for growth in Europe and Brazil, where beer sales continue to be strong as consumers move from taps to cans.

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