Ardagh Buys Saint-Gobain Unit for $1.7 Billion
01/14/2013| 02:06pm US/Eastern
PARIS--Glass and metal-packaging company Ardagh Group said Monday it was buying the U.S. glass-bottle operations of France's Compagnie de Saint-Gobain (>> SAINT GOBAIN) for $1.7 billion, in a deal that will make it the biggest company in the sector in the U.S.
The acquisition caps a three-year North American buying spree by Ardagh, which entered the U.S. in 2010 after buying French can-manufacturing business Impress Group. With the latest deal, Luxembourg-based Ardagh, which makes Absolut Vodka bottles, will overtake the largest glass-bottle maker world-wide, Perrysburg, Ohio's Owens-Illinois Inc. (>> Owens-Illinois, Inc.) in its home country.
Adding Saint-Gobain's business will extend Ardagh's glass bottle-making operations to include wine bottles, as well as increase the stretch of its manufacturing facilities from the East Coast to include other parts of the U.S., including Seattle.
It will also raise Ardagh's reliance on U.S. consumers of beer and wine, with 40% of sales and earnings before interest, taxes, depreciation and amortization to come from the U.S. after the deal is completed.
Saint-Gobain had planned to spin off its U.S. glass bottler in order to focus on building-materials business, but deteriorating financial markets scuppered the deal.
"If the deal is completed, the sale proceeds will be used mainly to strengthen the group's balance sheet," said Saint-Gobain Chief Executive Pierre-Andre de Chalendar.
It is Saint-Gobain's largest asset sale to date. The company in 2000 sold a stake in the eyeglasses lens maker Essilor for EUR929 million.
The deal remains subject to a final decision from Saint-Gobain after consulting personnel and is subject to U.S. antitrust approval.
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