Saint-Gobain to sell North American glass container operation to Ardagh Group for $1.7 bn

Compagnie de Saint-Gobain yesterday agreed to sell its North American glass container unit Verallia North America to Ireland's Ardagh Group for €1,275 million ($1.7 billion), as part of the French construction material giant's plan to exit from the low-margin business.

With revenues of $1.6 billion and operating profit of $171 million in 2012, Verallia North America is the second-largest glass container manufacturer in the US, behind Owens-Illinois.

Based in Muncie, Indiana, Verallia North America produces approximately 9 billion containers annually from its 13 facilities located throughout the US and employs approximately 4,400 people.

Pierre-André de Chalendar, chairman and CEO of Saint-Gobain, said, ''The offer is a new milestone in Saint-Gobain's strategic refocusing on the habitat sector. It puts a high value on our North American containers business, above the multiples contemplated at the time of the planned IPO in 2011, while providing it with promising scope for industrial development.

The Paris-based company said that the sale proceeds will be used mainly to strengthen its balance sheet, while continuing to pursue small or medium sized acquisitions.

''The acquisition of Verallia North America would be another important milestone in the evolution of Ardagh as it would add scale, diversity and value to our global packaging operations. The transaction would increase the size of our glass business globally by almost 60 per cent and be a very significant step in developing our operations in the US. It would result in approximately 40 per cent of Ardagh Group's total sales and EBITDA being generated in the US,'' said Paul Coulson, chairman of Ardagh.