Ardagh seals €1.3bn Verallia deal after regulator green light

Paul Coulson's Ardagh has completed its €1.3 billion purchase of rival packaging group Verallia North America (VNA) after US regulators gave the deal the green light on condition that it offload six manufacturing plants belonging to a Florida-based subsidiary.

Ardagh, which supplies everything from tins for John West salmon to Heineken beer bottles, agreed to buy bottle-maker VNA for €1.275 billion from French group Saint Gobain in January 2013.

The deal stalled last July after the US mergers watchdog, the Federal Trade Commission (FTC), objected on competition grounds.

It emerged at a pre-trial hearing in December that the two sides were in talks. Ardagh offered to sell six manufacturing plants, headquarters and infrastructure in Tampa Bay, Florida, that were part of Anchor Glass, a business it bought in 2012 for €720 million.

Ardagh confirmed yesterday that it has gone ahead with the purchase of VNA as the commission approved the settlement.

According to the FTC, it must sell the Anchor assets within six months.

The deadline for closing the VNA deal was due to run out at the end of this month. Ardagh and Saint Gobain were originally due to close it on January 13th, but agreed an extension shortly before that date.

The group has also agreed with another US regulator, the Pension Benefit Guaranty Corporation, to fund VNA staff's retirement scheme, which will remain open. Ardagh faced the possibility of court action by the agency, which had concerns about the impact of the ownership change on the plan.

Following the acquisition of VNA and the sale of the Anchor Glass operations, Ardagh said yesterday that its North America glass division would generate sales of $2 billion (€1.45bn) a year from 16 plants employing 5,000 people.

The group is borrowing €1.1 billion to fund the purchase. It raised €2.3 billion from bond markets in the two years before originally agreeing the VNA deal.

Deborah Feinstein, director of the FTC's bureau of competition, said the settlement reflected the agency's willingness to litigate on consumers' behalf.

The FTC feared that the merger would have created a near duopoly in the US market for beer and spirits bottles, reducing competition and ultimately driving up prices for consumers.

Mr Coulson owns 36 per cent of Luxembourg-headquartered Ardagh, which has a large number of Irish shareholders.