Manufacturers

Ardagh Group to sell six plants to settle $1.7bn FTC charges

11-Apr-2014 - By Jenny Eagle+
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Ardagh Group has agreed to sell six of its nine glass container manufacturing plants in the US to settle Federal Trade Commission (FTC) charges that its $1.7bn proposed acquisition of Saint-Gobain Containers could harm competitors who make glass containers to package beer and spirits.

The FTC’s settlement order requires Ardagh to sell six of the manufacturing plants and related assets it acquired through its 2012 acquisition of Anchor Glass Container Corporation, along with Anchor’s former corporate headquarters in Tampa, Florida.

Plant sell-off

The six plants are in: Elmira, New York; Jacksonville, Florida; Warner Robins, Georgia; Henryetta, Oklahoma; Lawrenceburg, Indiana; and Shakopee, Minnesota. The divestiture to a Commission-approved buyer must be completed within six months.

The remedy we achieved in this matter reflects the Commission’s willingness to litigate on behalf of consumers until all competitive concerns have been addressed,” said Deborah Feinstein, director, Bureau of Competition, FTC.

The proposed order creates a strong, independent third competitor that fully replaces the competition—in both the beer and spirits glass container markets—that would have been lost had the merger proceeded.”

The agreement will be subject to public comment for 30 days, until May 12, when the Commission will decide whether to make the proposed consent order final.

The FTC filed a federal suit in July 2013, to halt the proposed acquisition, pending completion of an administrative litigation to stop the transaction permanently.

Allegations

As alleged in an FTC administrative complaint, the proposed transaction would have concentrated most of the $5bn US glass container industry in two companies – the newly combined Ardagh/Saint-Gobain, and Owens-Illinois.

These two companies would have controlled about 85% of the glass container market for brewers and 77% of the market for distillers, reducing competition and likely leading to higher prices for customers who buy beer or spirits glass containers.

A Commission vote to accept the consent agreement containing the proposed consent order for public comment was 3-1, with Commissioner Joshua Wright voting no. 

Comments can be submitted electronically or in paper form.

FoodProductionDaily has contacted both Ardagh Group and Owens-Illinois for further comment.

Related topics: Manufacturers, Beer, Wine, Spirits, Cider, Packaging & Packing Materials, Containers