Owens-Illinois, the world’s largest maker of glass containers, agreed to buy the food-and-beverage glass business of Vitro SAB for about $2.15 billion to extend its reach in Mexico.
The all-cash transaction is expected to close within a year, Owens-Illinois said Wednesday in a statement. The deal still needs approvals from shareholders of Vitro, Mexico’s biggest producer of glass containers.
Competition for food-packaging industry assets is intensifying with a string of deals such as Rock-Tenn’s agreement in January to acquire MeadWestvaco in a transaction valued at about $8.5 billion to create the world’s second-biggest packaging company. France’s Cie. de Saint-Gobain SA is selling its Verallia glass-packaging unit.
With a projected $945 million in extra annual revenue, this deal could help Owens-Illinois boost yearly sales for the first time since 2011, it said. The Perrysburg, Ohio-based company said it may initiate a dividend after the first year as it reduces debt. The company will add Vitro’s five Mexican plants, one in Bolivia, and retain the unit’s management.
Bloomberg News, edited by ESM
