The FTC claims the deal would mean high costs for US brewers and distillers

The FTC claims the deal would mean high costs for US brewers and distillers

Glass bottle makers Saint-Gobain and Ardagh Group have said they will contest the US Federal Trade Commission's (FTC) legal bid to block the sale of Saint Gobain's US subsidiary Verallia to Ardagh.

The FTC announced on Monday (1 July) that it is challenging the US$1.7bn deal on the basis that it will "reduce competition" and mean that the combined company and its only remaining "significant" competitor, Owens-Illinois, will control 75% of the US market for beer and spirits glass containers. The transaction would result in higher costs for brewers and distillers, the FTC argued, and higher prices for consumers. 

The FTC has lodged an "administrative complaint" against the two companies, alleging that the acquisition would violate US antitrust law. 

But, both Paris-based Saint-Gobain and Ireland's Ardagh have said that they are "disappointed" by the FTC's move. 

"Saint-Gobain and Ardagh intend to vigorously defend the transaction in litigation, whilst at the same time working with the FTC to seek to resolve its concerns," Saint-Gobain said on its website. 

Ardagh added: "We believe that the transaction will benefit glass container customers and is fully consistent with the antitrust laws." 

The deal would combine the second-largest manufacturer of glass containers in the US, Saint-Gobain, and the third-largest, Ardagh, according to the FTC. Owens-Illinois is the largest. 

Expert analysis

2012 Beverage Packaging in the U.S.

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Market insights as well as statistical break-outs by type and size (in units) for eleven beverage categories. The report covers beverage-packaging issues, trends, and innovations by category and by be...read more