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FTC approves final order settling Ardagh Saint-Gobain acquisition

By Jenny Eagle+

19-Jun-2014

FTC approves final order settling Ardagh Saint-Gobain acquisition

The FTC (Federal Trade Commission) has made a final order to approve Ardagh’s proposed acquisition of Saint-Gobain after the company sold off six glass plants and related assets.

The FTC’s administrative complaint, issued in July 2013, alleged the acquisition would concentrate most of the $5bn US glass container industry in two companies – the newly combined Ardagh/Saint-Gobain and Owens-Illinois.  

Reducing competition

If the $1.7bn merger had proceeded as proposed, 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 possibly higher prices for customers buying glass containers for beer or spirits.

FoodProductionDaily reported in April Ardagh Group had agreed to sell six of its nine glass container manufacturing plants in the US to settle the FTC charges.

The plants are in: Elmira, New York; Jacksonville, Florida; Warner Robins, Georgia; Henryetta, Oklahoma; Lawrenceburg, Indiana; and Shakopee, Minnesota and the divestiture to a Commission-approved buyer had to 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 at the time.

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.”

KPS Capital Partners

Ardagh acquired the six plants through its 2012 acquisition of Anchor Glass Container Corporation, along with Anchor’s former corporate headquarters in Tampa, Florida.

The Commission has now approved Ardagh’s application to sell the six manufacturing plants and related assets to Glass Container Acquisition, an affiliate of KPS Capital Partners, as required under the now final settlement order.

The Commission vote approving the final consent order and a letter to the member of the public who commented on it was 3-1-1, with Commissioner Joshua Wright voting no and Commissioner Terrell McSweeny not participating.

The vote approving the proposed divestitures also was 3-1-1, with Wright voting no and McSweeny not participating.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends the Commission take law enforcement action.

A spokeswoman for Ardagh Group declined to comment on the final order of the FTC findings.

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