Owens-Illinois Inc. (OI) and Berli Jucker PLC (BJC.TH) of Thailand formed a joint venture that has agreed to buy Fraser & Neave Holdings Bhd.'s (3689.KU, P.FNH) Malaya Glass operations for about $221.7 million after debt and other items.
Packaging companies are heavily dependent on consumer-goods volumes, putting them at the leading edge of any recovery. Like many companies, cost-cutting has mitigated the downturn's impacts.
The latest move is part of Owens-Illinois strategy to grow through acquisitions and will significantly expand Owens-Illinois's presence in China and Southeast Asia. Owens-Illinois's portion of the purchase prices is $132.4 million. Chairman and Chief Executive Al Stroucken expects his company to see an immediate profit boost from the acquisition.
The venture is buying four glass plants that produce containers for beer, nonalcoholic beverage and food companies. It will manage sites in Malaysia and Vietnam, while a Chinese plant will be managed as part of Owens-Illinois's China operations. Berli Jucker, which licences Owens-Illinois technology at its Thailand glass operations, will take majority ownership of the Thai plant.
Owens-Illinois' shares closed Friday at $30.66 and were inactive premarket. The stock is down 6.7% this year, underperforming the broader market.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com;