Owens-Brockway Glass Container, Inc. completed the acquisition of food and beverage glass container business from Vitro, S.A.B. de C.V. (BMV:VITRO A), Distribuidora Álcali, S.A. de C.V. and Vitro Packaging, Inc.
September 31, 2015
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Owens-Brockway Glass Container, Inc. signed a definitive agreement to acquire food and beverage glass container business from Vitro, S.A.B. de C.V. (BMV:VITRO A), Distribuidora Álcali, S.A. de C.V. and Vitro Packaging, Inc. for approximately $2.2 billion in cash on May 12, 2015. The consideration will be paid on cash-free and debt-free basis, subject to a working capital adjustment and certain other adjustments. Owens-Brockway Glass will acquire Vitro América, Vitro Vimosa, Vitro Viquesa, Vitro Virreyes, Vitro Vigusa, Vitro Vitolsa, Envases de Vidrio de las Américas, Especialidades Operativas de América, Vidrio Lux and BBO Glassolutions. Owens-Illinois Group, Inc. and Owens-Brockway obtained debt financing commitments of $2.25 billion from Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch and Deutsche Bank Securities Inc. to fund the transaction. The availability of financing is subject to various customary conditions. The current leadership of Vitro's food and beverage glass container business will remain in place following the transaction close. Owens-Brockway will pay $150 million in case of termination of the agreement under certain circumstances.
The transaction is subject to expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the receipt of all required clearances, approvals or authorizations required by certain Mexican governmental entities under applicable antitrust and foreign investment laws, approval of Vitro shareholders, comprehensive due diligence by Owens-Brockway and customary regulatory approvals. The transaction has been unanimously approved by Board of Directors of Owens-Illinois, Inc. and Vitro, S.A.B. de C.V. As of July 7, 2015, the transaction was approved by shareholders of Vitro, S.A.B. de C.V. The transaction has been granted regulatory approval in the USA, and is subject to clearance from the competition and foreign investment authorities in Mexico. The deal is expected to close within 12 months and is expected to be accretive to cash flow and earnings per share in the first year after closing and also it is expected to add approximately $0.50 to earnings per share and at least $100 million in free cash flow after the third year close.
Deutsche Bank Securities acted as financial advisor and Alan M. Klein, Patrick Naughton, Stephen Wiseman, Erik Wang and Michael Chao, Peter Guryan and Ellen Frye, David Rubinsky, Aimee Adler, Holly Gurian, Rob Holo, Sophie Staples, Adeeb Fadil, Louise Kruger, Marcela Robledo, Krista McManus, Diego Kexel, Eugenio Guzman, Sebastian Lora and Julian Lujan of Simpson Thacher & Bartlett LLP and Hogan Lovells US LLP acted as legal advisors for Owens-Illinois, Inc. Alfaro, Dávila y Ríos, S.C. acted as a financial advisor and Chantal E. Kordula of Cleary Gottlieb Steen & Hamilton LLP acted as a legal advisor to Vitro. Pons Mestre, Ricardo Arturo and Federico De Noriega Olea of Hogan Lovells acted as legal advisors to Simpson Thacher & Bartlett. JPMorgan Chase & Co. (NYSE:JPM) acted as financial advisor to Vitro Packaging.
Owens-Brockway Glass Container, Inc. completed the acquisition of food and beverage glass container business from Vitro, S.A.B. de C.V. (BMV:VITRO A), Distribuidora Álcali, S.A. de C.V. and Vitro Packaging, Inc. on September 1, 2015.
Vitro, S.A.B. de C.V. is a glass producer in Mexico. The Company, through its subsidiary companies, produces, processes, distributes and markets a range of glass products. It operates through two segments: Glass containers, which includes glass containers, precision components, as well as machinery and molds for the glass industry, and Flat glass, which includes flat glass for the construction and automotive industries, and carbonate and sodium bicarbonate. The Company's products include glass containers, float glass, automotive OEM glass, automotive replacement glass, machinery & equipment, and chemicals. It is also a supplier of raw materials, mold manufacturing, equipment and machinery, and equipment for industrial and chemicals. Through its Containers and Float Glass business units, it serves the cosmetics, perfume pharmaceutical, construction and automotive industries, as well as the chemical, machinery and equipment, and molds industries.
Owens-Brockway Glass Container, Inc. completed the acquisition of food and beverage glass container business from Vitro, S.A.B. de C.V. (BMV: VITRO A), Distribuidora Álcali, S.A. de C.V. and Vitro Packaging, Inc.