Dunkirk glass plant sold

A Luxembourg-based company with roots in Ireland has reached a deal with Saint-Gobain to purchase Verallia, Saint-Gobain’s North American glass container operation, which includes a plant in Dunkirk.
Ardagh Group said Monday it would buy the glass container business for about $1.7 billion.
Ardagh bought Anchor Glass Container Corp. for $962 million in July. That move made it the third-largest glass container company in the U.S.
By acquiring Verallia, Ardagh would control 50 percent of the North American glass container market, and some analysts have said that fact could raise antitrust warning flags.
According to The Irish Times, Ardagh plans to borrow $1.45 billion through bond sales to finance the deal.
Ardagh was founded in Dublin in 1932 as the Irish Glass Bottle Company. It now operates in 26 countries and employs 22,000 people.
Saint-Gobain has been looking to spin off the glass container business for at least two years but shelved its plans because of problems with the Euro. The deal will allow Saint-Gobain to reduce its debt and concentrate on its more profitable production of sheet glass for the building materials industry.
In the most recent year for which figures are available, Verallia North America had sales of about $1.61 billion and posted an operating profit of $171 million. It has 13 industrial sites in the U.S., including the one in Dunkirk, and employs more than 4,400. VNA’s headquarters is in Muncie.
Its Dunkirk operation produces 3 million longneck beer bottles a day and has been the focus of significant capital investments by the company over the past 15 years.
Ardagh’s group executive Niall Wall told Agence France Press that the acquisition “would allow us to expand our glass operations into the very important wine sector in the U.S. for the first time.”
Ardagh has annual sales of about $5.4 billion. Customers include some already served by the Dunkirk plant, including AB InBev, parent company of Budweiser. Other Ardagh customers include Pernod, Heinz, Coca-Cola, Nestle, and Heineken.
Reuters reported that the deal “equates to 6.5 times Verallia North America’s 2012 earnings before interest, tax, depreciation, and amortization, which was $261 million.”
Saint-Gobain is now considering what to do with the rest of Verallia’s operations in Europe and Latin America, Reuters reported.
The transaction is expected to be concluded this year.[[In-content Ad]]