Oct. 26 (Bloomberg) -- Owens-Illinois Inc., the world’s largest producer of glass containers, fell the most in five weeks in U.S. trading after Venezuelan President Hugo Chavez ordered a government takeover of the company’s local unit.
The military arrived at the company’s Los Guayos factory, Stephanie Johnston, an Owens-Illinois spokeswoman, said in a telephone interview today. Los Guayos and a plant in Valera employ 1,000 people and account for less than 5 percent of Owens-Illinois’s global segment operating profit. Both are still operating, Johnston said.
Chavez is deepening a socialist revolution after his party suffered a setback in legislative elections Sept. 26, leading to the nationalization of oil companies, fertilizer makers, food processors and more than 6 million acres (2.5 million hectares) of farms and ranches. Perrysburg, Ohio-based Owens-Illinois “has been exploiting workers” and is on a list of companies the government plans to take over, Chavez said yesterday.
“The expropriation is already ready of this glass company,” Chavez said in comments carried on state television. “What’s it called? Owens-Illinois. Expropriate it.”
Owens-Illinois declined $1.72, or 5.8 percent, to $27.90 at 4:15 p.m. in New York Stock Exchange composite trading, the biggest daily drop since Sept. 21. The shares have fallen 15 percent this year.
Owens-Illinois said in an e-mailed statement today it was surprised to learn of the decision and is willing to work with the government “to better understand the situation.”
Owens-Illinois has been operating in Venezuela for more than 50 years and provides glass bottles to customers in the nation including Nestle SA, PepsiCo Inc., Anheuser-Busch InBev NV and Diageo Plc. Owens-Illinois hasn’t been officially notified of the expropriation and is reaching out now to the government, according to the statement.
In response to Chavez’s comments on the exploitation of workers, Johnston said Owens-Illinois is committed to complying with Venezuelan law.
Chavez on Oct. 5 announced the “forced acquisition” of the country’s leading farm-supply business, Agroislena C.A. Sucesora de Enrique Fraga Afonso, and on Oct. 10 ordered the nationalization of fertilizer companies Fertilizantes Nitrogenados de Oriente and Fertilizantes Nitrogenados de Venezuela. Chavez yesterday said any private bank that refuses to give credit to small businesses will also be nationalized.
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