This is the final required regulatory approval, and the company expects to close on this transaction within the next two weeks.
To enable the Commission to clear the deal after the initial six-week market investigation, O-I committed to divest the Barcelona, Spain, glass plant it is purchasing as part of this transaction and the Corsico, Italy, glass plant currently owned by O-I.
"We are pleased to have this resolution of the Commission's regulatory review process," said Steve McCracken, Owens-Illinois chairman. "This is an important milestone for Owens-Illinois in our transformation to being a great global company. BSN is an excellent company with excellent people and we look forward to working with them in building a strong market-oriented O-I Europe.
"Even with the divestiture of the two plants, the transaction still makes strategic and financial sense for O-I."
As previously announced on 18 February of this year, total consideration for this acquisition is €1,160 million, including the assumption of debt. In 2003 BSN reported preliminary unaudited net sales of approximately €1,270 million and recurring EBITDA of approximately €201 million.
Based on these results, O-I is confident that the BSN acquisition will increase its worldwide glass container sales by approximately 38 per cent. The company also expects the transaction to be accretive to earnings and cash flow in the first year, before synergies.
In February, Terry Wilkison, interim co-chief executive officer of the company, said: "BSN is a well-run company with strong management, excellent production facilities, a history of high-quality manufacturing and a strong customer base across Europe. Having licensed O-I technology since 1957, BSN would be an ideal addition to the O-I family."
Regarding the company's goals of increased cash flow and debt reduction, Thomas Young, O-I interim co-chief executive officer and chief financial officer said: "While the acquisition of BSN would increase O-I's total debt in the short run, we believe that the company's improvement initiatives for its core businesses combined with the cash flow and earnings accretion from this acquisition should reduce indebtedness over time.
"Also, as previously announced, the company has retained advisors to conduct a strategic review of our blow-moulded plastics operations. One possible outcome of this strategic review could be a decision to sell blow-moulded plastics, which would provide another means to reduce indebtedness."
The acquisition of BSN will make Owens-Illinois the largest glass container manufacturer in Europe, and will expand the company's consolidated net sales by approximately $1.5 billion. It will also give the Company entry into the glass markets of Germany, France and the Netherlands where the company currently does not have a manufacturing presence, and will expand the Company's presence in Spain.
BSN is the second largest glass container manufacturer in Europe with 19 plants, 40 furnaces and 129 glass production lines. The company supplies glass containers primarily for wine and spirits, other beverages including beer, and specialty food products.