FOR IMMEDIATE
RELEASE
For more information,
contact:
David
Johnson
Lisa Babington
Vice President, Investor
Relations
Director, Corporate Communications
Perrysburg, Ohio,
US
Perrysburg, Ohio,
US
567 336 2600
567 336 1445
dave.johnson@o-i.com
lisa.babington@o-i.com
O-I to Acquire Vitro's Food and Beverage Business
for $2.15 Billion
Provides a
Leading Position in Mexico; Expected to be Accretive
to
Cash Flow and EPS in 2016
Perrysburg, Ohio (May 13, 2015) -
Owens-Illinois, Inc. (NYSE: OI) announced today that it has reached
a definitive agreement with Vitro, S.A.B. de C.V. (BMV: VITROA), to
acquire Vitro's food and beverage glass container business in an
all-cash transaction valued at approximately $2.15 billion. Vitro
is the largest supplier of glass containers in Mexico. The
transaction, which has been approved by the boards of directors of
both companies, is subject to approval by Vitro's shareholders and
customary regulatory approvals. The deal is expected to close
within 12 months.
The transaction provides O-I with a competitive
position in the attractive and growing glass segment of the
packaging market in Mexico, further enhancing O-I's position as the
world's foremost glass container producer. The agreement includes
Vitro's five plants in Mexico and one in Bolivia, which together
employ 4,700 people. The current leadership of Vitro's food and
beverage glass container business will remain in place following
the transaction close. The acquired business is expected to
generate estimated annual revenue of $945 million and adjusted
EBITDA of $278 million[1]. Further,
O-I expects to realize approximately $30 million in run-rate cost
synergies by 2018 through a combination of procurement savings and
operating efficiencies. The transaction is expected to be accretive
to cash flow and earnings per share in the first year after
closing.
"We have long admired Vitro's business, and this
transaction marks an important strategic step for O-I in that it
allows us to establish a strong position in the attractive glass
container segment in Mexico," said Al Stroucken, chairman and CEO
of O-I. "Vitro's leading position, long-term customer relationships
and proven record of innovation and new product development will
enable us to capitalize on commercial opportunities in Mexico. In
the third year after close, this compelling transaction is expected
to add approximately $0.50 to our earnings per share and at least
$100 million in free cash flow, positioning us to drive even
greater value for shareholders."
"O-I is a clear leader in the global glass
container market and is the ideal partner for Vitro's food and
beverage container business," said Adriàn Sada González, chairman
of Vitro, S.A.B. de C.V. "We have a great deal in common with O-I
and look forward to the expertise they bring to help meet the
growing demands of our customers."
O-I has secured committed financing from Deutsche
Bank to fund the transaction and expects to utilize the strong free
cash flow of the combined business to reduce leverage following the
transaction.
Deutsche Bank Securities is serving as financial
advisor to O-I on the transaction and Simpson Thacher &
Bartlett LLP is serving as legal advisor.
# # #
About O-I
Owens-Illinois, Inc. (NYSE: OI) is the world's largest glass
container manufacturer and preferred partner for many of the
world's leading food and beverage brands. The Company had revenues
of $6.8 billion in 2014 and employs approximately 21,100 people at
75 plants in 21 countries. With global headquarters in Perrysburg,
Ohio, USA, O-I delivers safe, sustainable, pure, iconic,
brand-building glass packaging to a growing global marketplace. For
more information, visit o-i.com.
O-I's Glass Is Life(TM) movement promotes the
widespread benefits of glass packaging in key markets around the
globe. Learn more about the reasons to choose glass and join the
movement at glassislife.com.
Conference call scheduled for May
13, 2015
O-I CEO Al Stroucken, COO Andres
Lopez and acting CFO John Haudrich will conduct a conference call
to discuss the transaction on Wednesday, May 13, 2015, at 8:00
a.m., Eastern Time. A live webcast of the conference call,
including presentation materials, will be available on the O-I
website, www.o-i.com/investors, in the Presentations & Webcast
section.
The conference call also may be accessed by
dialing 888-733-1701 (U.S. and Canada) or 706-634-4943
(international) by 7:50 a.m., Eastern Time, on May 13. Ask for the
O-I conference call. A replay of the call will be available on the
O-I website, www.o-i.com/investors, for a year following the
call.
Forward-looking
statements
This document 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. The words "believe," "expect," "anticipate,"
"will," "could," "would," "should," "may," "plan," "estimate,"
"intend," "predict," "potential," "continue," and the negatives of
these words and other similar expressions generally identify
forward-looking statements. 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) foreign
currency fluctuations relative to the U.S. dollar, specifically the
Euro, Brazilian real, Colombian peso and Australian dollar, (2)
changes in capital availability or cost, including interest rate
fluctuations and the ability of the Company to refinance debt at
favorable terms, (3) the general political, economic and
competitive conditions in markets and countries where the Company
has operations, including uncertainties related to economic and
social conditions, disruptions in capital markets, disruptions in
the supply chain, competitive pricing pressures, inflation or
deflation, and changes in tax rates and laws, (4) consumer
preferences for alternative forms of packaging, (5) cost and
availability of raw materials, labor, energy and transportation,
(6) the Company's ability to manage its cost structure, including
its success in implementing restructuring plans and achieving cost
savings, (7) consolidation among competitors and customers, (8) the
ability of the Company to acquire businesses and expand plants,
integrate operations of acquired businesses, achieve expected
synergies and achieve estimated financial results, (9) the
ability of the Company to close acquisition transactions, (10)
whether acquisition transactions will be approved by competition
and other regulatory authorities, (11) whether acquisition
transactions will be accretive to the Company's earnings and/or
cash flow, (12) whether acquisition transactions will create
shareholder value, (13) the Company's ability to deleverage
following an acquisition and reach an expected leverage ratio (14)
unanticipated expenditures with respect to environmental, safety
and health laws, (15) the Company's ability to further develop its
sales, marketing and product development capabilities, and (16) the
timing and occurrence of events which are beyond the control of the
Company, including any expropriation of the Company's operations,
floods and other natural disasters, events related to
asbestos-related claims, and the other risk factors discussed in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2014 and any subsequently filed Annual Report on Form
10-K or Quarterly Report on Form 10-Q. It is not possible to
foresee or identify all such factors. Any forward-looking
statements in this document 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 assume any obligation to update or supplement any
particular forward-looking statements contained in this
document.
[1] Revenue and
adjusted EBITDA estimates are based on 3/31/15 (last 12 months)
plus an estimate of full year 2016 new business signed in 2014.
O-I to Acquire Vitro’s Food and
Beverage Business_5-13-2015
O-I Logo
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Owens-Illinois, Inc. via Globenewswire
HUG#1921271
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