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Muncie-based glass maker to be sold for $1.6B

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Ardagh Group said it has agreed to buy the Indiana-based glass bottle and jar manufacturing unit of Saint-Gobain SA for $1.7 billion to increase its packaging business and expand in the United States.

The offer for Muncie-based Verallia North America is a binding and irrevocable one, Luxembourg-based Ardagh said Monday in a prepared statement. French giant Saint-Gobain is discussing the planned sale with unions ahead of a planned completion date later this year.

Verallia North America has about 4,400 employees at 13 manufacturing plants in the United States, including more than 650 workers in Indiana. The company has about 300 workers at its headquarters in Muncie and it also has a plant in Dunkirk, northeast of Muncie, where it employs more than 350.

“The acquisition of Verallia North America would be another important milestone in the evolution of Ardagh,” Chairman Paul Coulson said in a prepared statement.

Verallia will increase the size of Ardagh's glass business by 60 percent, and leave the U.S. accounting for 40 percent of its sales and earnings at a time when retail sales are on the increase. A housing-market rebound, higher stock prices and an improving job market are helping sustain consumer spending, which accounts for about 70 percent of the economy.

Verallia had sales of about $1.61 billion and an operating profit of $171 million in 2012.The company says it is the second-biggest maker of glass bottles and jars in the United States.

Ardagh plans to raise $1.45 billion in debt, denominated in both euro and dollar-denominated senior secured notes and senior notes to finance the purchase. Fourth-quarter sales increased by about 5 percent, with earnings “marginally higher,” the company said.

The acquisition is subject to regulatory approval.
 

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  1. Apologies for the wall of text. I promise I had this nicely formatted in paragraphs in Notepad before pasting here.

  2. I believe that is incorrect Sir, the people's tax-dollars are NOT paying for the companies investment. Without the tax-break the company would be paying an ADDITIONAL $11.1 million in taxes ON TOP of their $22.5 Million investment (Building + IT), for a total of $33.6M or a 50% tax rate. Also, the article does not specify what the total taxes were BEFORE the break. Usually such a corporate tax-break is a 'discount' not a 100% wavier of tax obligations. For sake of example lets say the original taxes added up to $30M over 10 years. $12.5M, New Building $10.0M, IT infrastructure $30.0M, Total Taxes (Example Number) == $52.5M ININ's Cost - $1.8M /10 years, Tax Break (Building) - $0.75M /10 years, Tax Break (IT Infrastructure) - $8.6M /2 years, Tax Breaks (against Hiring Commitment: 430 new jobs /2 years) == 11.5M Possible tax breaks. ININ TOTAL COST: $41M Even if you assume a 100% break, change the '30.0M' to '11.5M' and you can see the Company will be paying a minimum of $22.5, out-of-pocket for their capital-investment - NOT the tax-payers. Also note, much of this money is being spent locally in Indiana and it is creating 430 jobs in your city. I admit I'm a little unclear which tax-breaks are allocated to exactly which expenses. Clearly this is all oversimplified but I think we have both made our points! :) Sorry for the long post.

  3. Clearly, there is a lack of a basic understanding of economics. It is not up to the company to decide what to pay its workers. If companies were able to decide how much to pay their workers then why wouldn't they pay everyone minimum wage? Why choose to pay $10 or $14 when they could pay $7? The answer is that companies DO NOT decide how much to pay workers. It is the market that dictates what a worker is worth and how much they should get paid. If Lowe's chooses to pay a call center worker $7 an hour it will not be able to hire anyone for the job, because all those people will work for someone else paying the market rate of $10-$14 an hour. This forces Lowes to pay its workers that much. Not because it wants to pay them that much out of the goodness of their heart, but because it has to pay them that much in order to stay competitive and attract good workers.

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