5 March 1998: US-based packaging company Owens-Illinois Inc. announced that it has signed a definitive agreement to acquire the worldwide glass and plastic packaging businesses of BTR Plc, the UK engi…
5 March 1998: US-based packaging company Owens-Illinois Inc. announced that it has signed a definitive agreement to acquire the worldwide glass and plastic packaging businesses of BTR Plc, the UK engineering conglomerate, in an all-cash transaction valued at US$ 3.6 billion. The transaction is expected to be accretive in 1999 and have a neutral effect on earnings in 1998. Joseph H. Lemieux, Owens-Illinois chairman and chief executive officer, said, “BTR“s worldwide glass and plastic packaging operations are an outstanding fit with our existing business. This is a major step in our strategy to expand our international glass and plastic packaging businesses, extend our global presence, increase our operating margins, maintain our technological leadership, and continue supporting our major industrial customers as they expand their businesses worldwide.” Based on historical performance, Owens-Illinois“ international operations are expected to contribute nearly half of the company“s sales (on an annual basis) following completion of the transaction. In 1997, the company“s international operations accounted for approximately 36% of the company“s sales. BTR Packaging had 1997 sales of approximately US$ 1.5 billion and, pro forma for the acquisition, estimated earnings before interest, taxes, and unusual items of US$ 305 million, the company reported. The transaction will be financed initially by bank loans. Promptly after closing, Owens-Illinois said it intends to refinance part of the bank borrowings by issuing a combination of public debt and equity securities, with the objective of maintaining its debt-to-capital ratio at approximately current levels. The transaction, which is subject to the approval of BTR“s shareholders and customary regulatory approvals, is scheduled to close in the second quarter. Lemieux added, “BTR Packaging“s operations are widely recognized as being among the best managed businesses in their respective industries. They have set high standards of quality and customer service, based on leadership in technology, cost control, and continuous improvement in productivity. We look forward to having them join the Owens-Illinois family.” BTR“s ACI Glass Packaging unit is a glass container manufacturer in Australia and New Zealand and a supplier in the United Kingdom. In addition, with joint ventures in glass container manufacturing facilities in China and Indonesia, ACI has made initial investments in economies which, the company says, are expected to show above-average growth in the long term.