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. anti-trust laws.
Ardagh said in January that 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.
Representatives from the two companies could not 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 that 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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