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Apollo to buy Verallia for €2,945m from Saint-Gobain

‘There has been some substitution into rigid plastics and stand-up pouches but glass remains a premium product for luxury goods such as beverages’

By Jenny Eagle+

09-Jun-2015
Last updated on 09-Jun-2015 at 11:00 GMT2015-06-09T11:00:18Z

Apollo to buy Verallia for €2,945m from Saint-Gobain

Saint-Gobain has been in talks with Apollo Global Management, (Apollo) to buy Verallia for €2,945m, due to close at the end of the year, subject to the approval of competition authorities, including the European Commission.

Verallia is a manufacturer of glass bottles and jars, generating €2,391m in net sales and €230m in operating income in 2014 (excluding Verallia North America , which exited the Group in April 2014).

'Glass is the most concentrated segment of the overall packaging industry'

It has 47 plants in 13 countries and employs nearly 10,000 people.

Saint-Gobain announced it was in the first steps towards an initial public offering (IPO) of Verallia , its glass packaging arm in 2011. 

Nicholas Mockett, head of Packaging M&A (mergers and acquisitions) at Moorgate Capital advisory firm in London told FoodProductionDaily, glass is the most concentrated segment of the overall packaging industry, reflecting its maturity – it is considered the original form of packaging – and the capital intensity.

Although there has been some substitution, for example into rigid plastics and stand-up pouches, glass remains an important substrate,” he said.

It is often perceived as a premium product and used in luxury goods such as fragrance and beverages. These end markets continue to grow as the rising middle classes globally spur on demand for luxury.”

BPI minority stake

Apollo is also in talks with Banque Publique d’Investissement (BPI) in connection with BPI’s potential acquisition of a minority stake in Verallia.

Pierre-André de Chalendar, chairman/CEO, Saint-Gobain, said it chose Apollo for the quality of its offer and its support for the industrial project and for Verallia’s employees.

The sale of Verallia would complete Saint-Gobain’s strategic refocus on the design, manufacture and distribution of innovative, high-performance solutions for the habitat and industrial markets, on which the Group continues to develop,” he said.

Robert Seminara, senior partner, Apollo, and Jean-Luc Allavena, operating executive, Apollo, said it was looking forward to support the continued growth of Verallia.

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