Ardagh proceeds with Verallia deal after FTC dispute

The US FTC building.

Ardagh claims it will proceed with its acquisition of Verallia North America (VNA) after negotiating a settlement with the US Federal Trade Commission (FTC).

It has confirmed in a statement it will repay $1.5bn in bonds to fund its $1.7bn (€1.2bn) acquisition of Verallia after it missed the deadline of January 13 to close the transaction.

The firm announced in January last year it planned to raise $1.5bn to finance the deal but it didn’t meet the payments on time. It now has to repay its euro bond, a $420m bond and $700m of a $850m bond by Friday, January 17.

Financial negotiations

The bonds included a €250m issue with a 5pc coupon, or interest rate, a $420m bond with a 4.875pc coupon, and $850m with a 7pc coupon.

To complete the buy-out, the firm has arranged committed replacement bridge financing, which it will refinance in the capital markets.

"To enable it to complete the acquisition of VNA, Ardagh has arranged committed replacement bridge financing which it expects to refinance in the capital markets in due course," a company spokesman said in a statement.

Final deadline extension

Ardagh and Saint-Gobain have now agreed to extend the final closing date under the Share Purchase Agreement from January 13 to April 30, 2014

The FTC tried to block the Verallia parternship in July last year when it filed an administrative complaint alleging the acquisition would violate antitrust law.

The watchdog claimed the acquisition would "hurt consumers nationwide" in the US because it would lead to increased costs for drinks containers, despite denials from Ardagh.

The glass packaging manufacturer said at the time its original acquisition of VNA was consistent with the antitrust laws but it is “very clear” that the amended transaction would “more than overcome” any possible regulatory concerns.

The glassmaker entered the US market in 2012 when it purchased Anchor Glass and Leone Industries.


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