Owens-Illinois Signs Definitive Agreement to Sell Blow-Molded Plastic Container Assets to Graham Packaging Company
July 28 2004 - 6:01PM
PR Newswire (US)
Owens-Illinois Signs Definitive Agreement to Sell Blow-Molded
Plastic Container Assets to Graham Packaging Company TOLEDO, Ohio,
July 28 /PRNewswire-FirstCall/ -- Owens-Illinois, Inc. (NYSE:OI)
today announced that the Company has entered into a definitive
agreement with Graham Packaging Company based in York, Pa., a
portfolio company of The Blackstone Group, to sell its blow-molded
plastic container operations in North America, South America and
Europe. Total consideration for the sale will be approximately $1.2
billion to be paid in cash at closing. The transaction is expected
to close in the fourth quarter, subject to regulatory approvals.
The proceeds from the sale will be used to pay down debt. "This is
another critical step forward in the transformation of Owens-
Illinois into a modern, vibrant global growth enterprise," said
Steve McCracken, Owens-Illinois Chairman and CEO. "We will now be
able to deleverage ourselves in the short term, and be better able
to focus our resources on the core businesses, technologies and
channels that represent our long term future." Included in the sale
are 24 plastics manufacturing plants in the U.S., two in Mexico,
three in Europe and two in South America, serving consumer products
companies in the food, beverage, household, chemical and personal
care industries. Net sales for the businesses being sold were
approximately $1.1 billion in 2003. Owens-Illinois is advised in
this transaction by Deutsche Bank. "We recognize the talent and
expertise of Owens-Illinois employees as industry leaders," said
Philip R. Yates, Chairman and CEO of Graham Packaging Company. "The
O-I operations will be an excellent strategic fit with our existing
57 plants throughout North America, Europe, and Latin America which
are solely focused on customized blow-molded plastic containers."
O-I announced on June 21 it had completed the acquisition of BSN
Glasspack, S.A., for approximately US$1.4 billion, adding 18 glass
container manufacturing plants and nearly doubling the Company's
European presence. "We have now become truly global in glass with
important leveraging capabilities in scale and scope, while
maintaining an important and differentiated presence in the
complimentary plastic arenas of closures and health care
packaging," said McCracken. "This sale, while representing a
difficult choice for us, marks a crucial shift in the portfolio and
strategy of O-I. Our redefined market presence, combined with
differentiated technology sets, should serve our target markets and
investment communities well in the years ahead." As previously
announced, the Company has implemented several liquidity
improvement initiatives to reduce debt, improve cash flow and
increase investor value. O-I also announced in June that ACI
Packaging, a subsidiary of the Company, sold a substantive part of
its plastics packaging business in Australia and New Zealand to
Visy Industrial Plastics, a wholly-owned subsidiary of Visy
Industrial Packaging. About O-I Owens-Illinois is the largest
manufacturer of glass containers in the world, with leading
positions in Europe, North America, Asia Pacific and South America.
O-I is also a leading manufacturer of health care packaging
including prescription containers and medical devices, and closures
including tamper- evident caps and dispensing systems. The Company
reported 2003 net sales of $6.0 billion. About Graham Packaging
Company Graham Packaging Company, L.P., is a worldwide leader in
the design, manufacture, and sale of customized blow molded plastic
containers for the branded food and beverage, household and
personal care, and automotive lubricants markets. The Blackstone
Group of New York is the majority owner of Graham Packaging.
Forward-looking statements This news release contains
"forward-looking" statements within the meaning of Section 21E of
the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933. Forward-looking statements reflect the
Company's current expectations and projections about future events
at the time, and thus involve uncertainty and risk. It is possible
the Company's future financial performance may differ from
expectations due to a variety of factors including, but not limited
to the following: (1) the Company's ability to complete planned
divestitures on the terms and conditions and within the time frames
presently anticipated, (2) foreign currency fluctuations relative
to the U.S. dollar, (3) changes in capital availability or cost,
including interest rate fluctuations, (4) the general political,
economic and competitive conditions in markets and countries where
the Company has operations, including disruptions in the supply
chain, competitive pricing pressures, inflation or deflation, and
changes in tax rates and laws, (5) consumer preferences for
alternative forms of packaging, (6) fluctuations in raw material
and labor costs, (7) availability of raw materials, (8) costs and
availability of energy, (9) transportation costs, (10)
consolidation among competitors and customers, (11) the ability of
the Company to integrate operations of acquired businesses and
achieve expected synergies, (12) unanticipated expenditures with
respect to environmental, safety and health laws, (13) the
performance by customers of their obligations under purchase
agreements, and (14) the timing and occurrence of events which are
beyond the control of the Company, including events related to
asbestos-related claims. It is not possible to foresee or identify
all such factors. Any forward- looking statements in this news
release are based on certain assumptions and analyses made by the
Company in light of its experience and perception of historical
trends, current conditions, expected future developments, and other
factors it believes are appropriate in the circumstances.
Forward-looking statements are not a guarantee of future
performance and actual results or developments may differ
materially from expectations. While the Company continually reviews
trends and uncertainties affecting the Company's results of
operations and financial condition, the Company does not intend to
update any particular forward-looking statements contained in this
news release. DATASOURCE: Owens-Illinois, Inc. CONTACT: Sara Theis
of Owens-Illinois, +1-419-247-1297 Web site: http://www.o-i.com/
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