FTC Challenges Saint-Gobain Deal

The Federal Trade Commission is challenging the proposed $1.7-billion acquisition of Saint Gobain's glass manufacturing subsidiary by Luxembourg-based Ardagh Group S.A.

Saint-Gobain Containers Inc., which operates under the name Verallia North America, employs about 225 in Milford and is headquartered in Muncie, Ind.

The FTC said it objects to the deal, announced in January, because it will reduce competition and leave the two merged firms and its only remaining significant competitor, Owens-Illinois, controlling more than 75 percent of the U.S. market for glass containers used for beer and spirits customers. The FTC said the deal would result in higher prices.

The FTC said it has issued a complaint against France-based Saint-Gobain and Ardagh, alleging that the acquisition would violate U.S. antitrust laws. The agency is also seeking a temporary restraining order and preliminary injunction to stop the deal pending an administrative trial on its concerns. The trial is scheduled to begin Dec. 2.

The complaint from the FTC said prices for glass bottles from the three companies have already increased in recent years more than plastic and aluminum can prices. Ardagh entered the U.S. market in 2012 by acquiring Anchor Glass Container Corp., which had been the third-largest glass manufacturer in the U.S., and Leone Industries, a small, single-plant glassmaker. The FTC said the Saint-Gobain acquisition would be Adagh's third in just over a year.

In a statement on its website, Ardagh briefly responded to the FTC complaint.

"Ardagh is disappointed in the action that the commission has taken. We believe that the transaction will benefit glass container customers and is fully consistent with the antitrust laws," the statement said. "Ardagh intends to vigorously defend the transaction in litigation, (while) at the same time working with the FTC to seek to resolve its concerns."

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