Graham Packaging Company, has signed a definitive agreement to acquire the Plastic Container business unit of Owens-Illinois, Inc., of Toledo, Ohio, for approximately $1.2 billion. Closing of the transaction is subject to regulatory approval and other customary conditions.
The purchase positions Graham Packaging to become a leading producer of value-added blow-moulded plastic packaging in North America-an estimated $1.8 billion in sales in North America and a global total of $2.2 billion, based on combined company figures.
Graham Packaging will grow from 4,000 employees to a total of more than 9,000 employees and will add 31 plants to its current complement of 57 plants throughout North America, Europe, and South America. Of the 31 new plants, 24 are located in the United States, two are in Mexico, three are in Europe, and two are in South America. Graham Packaging will keep its headquarters in York, Pennsylvania.
“We have long admired Owens-Illinois,” said Philip R. Yates, chairman and CEO of Graham Packaging. “O-I’s plastics container business is a good match with Graham Packaging in terms of its emphasis on technology, commitment to high quality, and its culture of customer service.
“Our goal is to become the clear customer-preferred global leader in value-added, technology-based plastic packaging,” Yates added. “This move gives us industry-leading plants, processes and products, technical resources, design teams, and overall the best people in the industry.
“For our customers, this means more resources resulting in even better value in terms of products, service, and innovative technology,” Yates said. “For employees, this means an exciting opportunity to be part of a global leader in the rigid plastics packaging field.
“In connection with this acquisition,” said Yates, “We intend to refinance a majority of our outstanding debt. We have received financing commitments from Citigroup, Deutsche Bank, and Goldman Sachs.”
Roger M. Prevot, president and COO of Graham Packaging, will head up the integration process. “Once this transaction closes, we will go through an intense period of evaluation to determine how the two organizations will knit together,” he said. “We have a lot to learn from each other, and we will be looking to integrate under the proven Graham business model, while utilizing best practices from each side of the equation.”
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