Ardagh poised to become largest glassmaker in US
Published 08/03/2014 | 02:30
GLASSMAKER Ardagh is preparing the ground in the United States for the expected approval of its $1.7bn (€1.2bn) acquisition of a rival business being sold by France's Saint-Gobain.
That deal is likely to be given the go-ahead by the US trade watchdog within weeks.
Ardagh, which is controlled by Dublin financier Paul Coulson, pictured, has appointed finance director John Riordan as president of its North American operations. He's being replaced in his current role by David Matthews, formerly of UK packaging firm DS Smith. Mr Matthews becomes Ardagh's new chief financial officer.
The company said John Riordan's new role in the US "reflects the importance of this market to future growth".
Aradgh has been trying to complete the acquisition of Saint-Gobain's Verallia North American unit since first announcing it early last year.
The US Federal Trade Commission (FTC) muscled in on the deal, launching a lawsuit to prevent it from proceeding. It claimed that the tie-up would "hurt consumers" across the United States through higher prices for glass containers.
"This combination would lead to higher costs for brewers and distillers and less innovation in the glass container industry. Ultimately, this transaction will result in higher prices," said the FTC.
Since then, Ardagh has been working with the FTC to find a solution that would enable it to proceed with the Verallia acquisition. Ardagh proposed the sale of six US glass container manufacturing sites it already owns, as well as its US HQ an effort to reach a settlement.
Ardagh has enga-ged an investment bank to handle the sale, which is "well under way", according to the FTC.
A number of initial expressions of interest have already been received, and the FTC appears satisfied that the plants will be sold as a going concern to an "approvable buyer". Ardagh and the FTC's legal team are negotiating "certain details" related to a consent proposal that includes the sale of the six plants already owned by the glass maker.
The company is currently the third biggest player in the $5bn US glass container industry.
The acquisition of Verallia North America would make it number two, placing it just behind rival Owens- Illinois.