Ardagh Buy of Saint-Gobain Containers Challenged by FTC

The U.S. Federal Trade Commission challenged Ardagh Group SA’s proposed $1.7 billion acquisition of Saint-Gobain Containers Inc., saying the deal would reduce competition in the U.S. market for beer and liquor bottles.

The FTC filed an administrative complaint today and said it would seek court orders to block the transaction, according to a statement on the agency’s website.

“If Ardagh is allowed to acquire Saint-Gobain, it would eliminate beneficial competition that has led to lower prices for beer and spirits bottles,” Norman Armstrong, Jr., deputy director of the FTC’s Bureau of Competition, said in the statement. “Ultimately, this transaction will result in higher prices for consumers.”

Ardagh said in an e-mailed statement it was disappointed with the FTC’s complaint and would “vigorously defend the transaction in litigation” while working with the agency to resolve its concerns.

The deal had been described as a “milestone” by Pierre-Andre de Chalendar, chief executive officer of Saint Gobain’s parent company, Cie. de Saint-Gobain SA, as he exits packaging to focus Europe’s biggest supplier of building materials on its other businesses. Saint-Gobain, based in Courbevoie, France, near Paris, planned to pursue targets in Asia and other emerging markets and strengthen its balance sheet, de Chalendar said in January.

Merged Firm

Ardagh, a European glass and metal company that has clients such as brewer Heineken NV and cosmetics maker L’Oreal SA, entered the U.S. glass container market in 2012 by acquiring Anchor Glass Container Corp., the industry’s No. 3 at the time, and Leone Industries, a small, single-plant glassmaker.

The FTC said the proposed deal would leave the merged firm and its only significant competitor, Owens-Illinois Inc., with control of more than 75 percent of the U.S. market for glass liquor and beer containers. Americans use more than 18 billion of the bottles annually, the FTC said.

The acquisition would be Luxembourg-based Ardagh’s third purchase of a U.S. glassmaker in little more than a year and would marry the second- and third-largest U.S. glass container producers, the FTC said.

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