Sunday 27 May 2018

Ardagh likely to delay its €3bn flotation amid takeover battle

John Mulligan

John Mulligan

Ardagh is almost certain to delay an expected €3bn flotation until 2014 as the Irish glass giant fights to gain control of Saint-Gobain's North American unit.

The US Federal Trade Commission (FTC) has alleged that a planned $1.7bn (€1.3bn) takeover of Saint-Gobain-owned Verallia North America by the Irish company will damage competition in the sector and result in higher prices for consumers.

The acquisition would make Ardagh – headed and controlled by Dubliner Paul Coulson – the single largest glass container producer in the United States, with an estimated 49pc share of the $5bn (€3.8bn) US industry.

The FTC has told Ardagh and France-based Saint-Gobain that a hearing in relation to the anti-competition charges won't be held until the beginning of December.

Ardagh, which is headquartered in Luxembourg, pulled a planned US flotation in 2011 due to market turmoil.

The company announced the planned acquisition of Verallia in January and indicated that once that deal went through, it would reassess the planned initial public offering (IPO).

It has been widely anticipated in the markets that Ardagh was aiming to float in New York towards the end of this year, though the company had not set a specific timetable.

The FTC has sought a preliminary injunction to prevent the acquisition by Ardagh from proceeding until the administrative trial takes place in December.

It's highly unlikely Ardagh would proceed with IPO plans without having clarity on whether or not it will be able to consummate the Verallia deal.

A spokesman for Ardagh declined to comment on the flotation plans. "Ardagh is disappointed in the action that the commission has taken," the company said.

"We believe that the transaction will benefit glass container customers and is fully consistent with the antitrust laws. Ardagh intends to vigorously defend the transaction in litigation, while at the same time working with the FTC to seek to resolve its concerns."

Saint-Gobain also said that it would defend the deal and work with the FTC.

"If Ardagh is allowed to acquire Saint-Gobain, it would eliminate beneficial competition that has led to lower prices for beer and spirits bottles," said Norman Armstrong Jr, deputy director of the FTC's Bureau of Competition. "This combination would lead to higher costs for brewers and distillers and less innovation in the glass container industry."

Brewers and distillers are the biggest users of glass containers in the US, accounting for over 60pc of usage.

Irish Independent

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