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

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.