The completion of the acquisition is subject to certain conditions including regulatory approval and the closing of Ball's acquisition of Rexam.
Niall Wall, CEO, Ardagh, to step down
Ardagh will acquire 10 beverage can manufacturing plants and two end plants in Europe, seven beverage can manufacturing plants and one end plant in the US, two beverage can manufacturing plants in Brazil and innovation and support functions in Germany, the UK, Switzerland and the US.
"Whilst we do not currently operate in the beverage can market, the business we are acquiring is highly complementary to our existing metal and glass businesses,” said Paul Coulson, chairman, Ardagh.
“The acquired business has an excellent management team and strong customer relationships."
In conjunction with the news, Ardagh has disclosed its Q1 Earnings Report and announced after 10 years, CEO, Niall Wall will step down from the role in September.
He will be replaced by Ian Curley former CFO, Smurfit Kappa Group, in June.
It revealed Q1 revenues of €1,218m represented an increase of 1% at actual exchange rates and was 1% lower at constant currency, compared with the same period in 2015.
Revenue in Glass Packaging of €743m in the quarter increased by 1% compared with the same period last year at actual exchange rates and was 2% lower at constant currency.
Revenue in Glass Packaging Europe decreased by 5%
Glass Packaging North America revenue of €422m represented an increase of 6% compared with the same period last year and was in line with the prior year at constant exchange rates.
Revenue in Glass Packaging Europe decreased by 5% to €321m compared with the same period in 2015, primarily due to the timing of shipments, and was 4% lower at constant exchange rates.
According to Wall, the Group’s revenue and cash flows are both subject to seasonal fluctuations.
“Demand for our glass products is typically strongest during the summer months and in the period prior to December because of the seasonal nature of beverage consumption,” he said.
“Demand for our metal products is largely related to agricultural harvest periods. The investment in working capital for Glass Packaging North America and Glass Pack aging Europe typically peaks in the first quarter.
“The investment in working capital for Metal Packaging generally builds over the first three quarters of the year, in line with the seasonal pattern, and then unwinds in the fourth quarter, with the calendar year-end being the low point.”
Metal Packaging revenue of €475m in the first quarter increased by 1% compared with the same period last year, at both actual and constant exchange rates.
In 2015, the German competition authority (the Federal Cartel Office) initiated an investigation of the practices of metal packaging manufacturers in Germany, including Ardagh. The investigation is ongoing, and there is at this stage no certainty as to the extent of any charge which may arise.
European Commission approves Ball's acquisition of Rexam
Ardagh expects to finance the Ball acquisition with a combination of cash and secured and unsecured debt. The acquisition is expected to close by the end of June 2016.
The European Commission approved Ball Corporation’s acquisition of Rexam subject to the divestment of 12 plants in Europe in January this year.
The deal is on condition Ball divest eight of its existing European metal beverage can manufacturing plants and two end plants, along with two of Rexam's metal beverage can manufacturing plants.
The business to be divested will have a manufacturing capacity in the EEA of more than 18 billion cans.
The beverage can maker must also divest what it called ‘European innovation and support functions’ in Bonn, Germany, Chester, UK and Zurich, Switzerland.
Ball Corporation said it was to acquire Rexam for $6.6bn (£4.3bn) in February 2015 .