--FTC seeks to block Ardagh Group's planned acquisition of
Saint-Gobain's glass-bottle operations
--The $1.7 billion deal was expected to create the biggest U.S.
company in the sector
--Ardagh said it would defend the deal in litigation while
working to resolve FTC concerns
(Updates with comment from Ardagh in the fourth paragraph.)
By Kristin Jones
The Federal Trade Commission is seeking to block glass and
metal-packing firm Ardagh Group's planned acquisition of Compagnie
de Saint-Gobain S.A.'s (SGO.FR) U.S. glass-bottle operations,
saying the purchase would violate U.S. antitrust laws.
Ardagh said in January it planned to buy Saint-Gobain's glass
bottle-making operations for $1.7 billion, in a deal expected to
create the biggest U.S. company in the sector.
The FTC said Monday the deal would reduce competition and result
in the merged company and rival Owens-Illinois Inc. (OI)
controlling more than 75% of the U.S. markets for glass containers
for beer and liquor customers.
Ardagh said in a statement the company is disappointed with the
FTC's action and that a transaction will benefit glass-container
customers. The company said it will defend the deal in litigation,
while working with the FTC to resolve its concerns.
A representative from Saint-Gobain couldn't immediately be
reached for comment.
"This combination would lead to higher costs for brewers and
distillers and less innovation in the glass container industry,"
said Norman Armstrong Jr., deputy director of the FTC's bureau of
competition. "Ultimately, this transaction will result in higher
prices for consumers."
The agency has authorized its staff to seek a temporary
restraining order and preliminary injunction on the deal pending an
administrative trial.
The FTC noted glass bottle prices have increased more than
plastic bottle and aluminum can prices in recent years, as three
manufacturers, including Ardagh and Saint-Gobain, have dominated
the market.
Reducing the number of competitors even more would make it much
easier for two remaining companies to ratchet up prices, the FTC
said.
Ardagh has been on a three-year North American buying spree
since entering the U.S. market in 2010 after buying French
can-manufacturing business Impress Group.
Write to Kristin Jones at kristin.jones@dowjones.com
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