As previously reported in Glassonline, Canada“s Consumers Packaging Inc. is in the process of becoming the third-largest supplier of glass bottles and jars in North America. With seven plants in Cana…
As previously reported in Glassonline, Canada“s Consumers Packaging Inc. is in the process of becoming the third-largest supplier of glass bottles and jars in North America. With seven plants in Canada, Consumers already makes the bottles for about 80% of the beer, soft drinks and spirits produced in the country. And now the deal for the assets of US-based Anchor Glass Container Corp., which was declared bankrupt last September, is nearing official conclusion. Under the deal, Consumers will buy 11 US plants, and contracts to supply glass containers and packaging to Anheuser-Busch Cos. and Bacardi-Martini USA Inc. The US$ 392.5 million purchase is part of a joint-partnership deal with North America“s largest glass container maker, Owens-Illinois Inc. Consumers will pay US$ 265.5 million, including US$ 58.9 million in preferred and common stock. The Consumers-Owens Illinois offer bettered a US$ 365 million bid by the second biggest US glass bottle maker, Ball-Foster Glass Container Corp. Owens-Illinois played a key role in Consumers“ bid for Anchor“s assets. As its part of the deal, Owens will purchase two Californian bottling and packaging plants for US$ 125 million, including a contract to sell bottles to Coors Brewing Co. The Anchor acquisition is expected to more than double Consumers“ sales to US$ 1 billion a year. For the 12 months to 30 September 1996, it had sales of US$ 459 million. But in spite of its solid position during a time of consolidation in an industry seriously affected by excess supply, Consumers“ share price has slipped. The shares have traded as low as US$ 5.75 and to a maximum of US$ 8.63 in the past year. In the summer of 1995, the shares were trading at US$ 13.63. But then the company“s earnings began to weaken, mainly due to a price war in the North American glass bottle industry. The war started when France“s Saint-Gobain beat Consumers“ US$ 675 million bid to buy Foster-Forbes Glass of the United States. That was the beginning of a period that saw other firms, including Anchor and Consumers, cut prices to retain customers and consequently see their earnings fall.