Ireland-based packaging company Ardagh Group has agreed to buy South African glass packaging supplier Consol Holdings for an equity value of R10.1bn ($635m).

Based in Johannesburg, Consol manufactures packaging for the beer, wine, spirits, food and non-alcoholic beverage sectors.

The company operates four glass production facilities and caters to international, regional and domestic customers.

It generated consolidated revenues of R9.0bn in the 12 months to 30 June.

Ardagh chairman Paul Coulson said: “We are very pleased to expand our European and North American presence in glass packaging into Africa with the acquisition of Consol, a high-quality business, led by an excellent management team.

“Consol is a market leader in the region, with great relationships across a diversified domestic and multinational customer base. Virtually all of Consol’s multinational customers are also customers of Ardagh.

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“We look forward to welcoming Consol to the Ardagh family and to investing in the long-term growth of the African market, driven by consumer trends and rising sustainability awareness.”

Ardagh will use a combination of its own cash resources and the assumption of Consol’s existing R5.7bn net debt to fund the transaction.

The deal is expected to close in the second quarter of next year subject to certain conditions being met, including regulatory approvals.

Consol chairman Bruce MacRobert said: “The Consol team has built a great business, with an established reputation for delivering quality products to a growing customer base.

“Ardagh’s long-term presence in and commitment to glass packaging makes it the ideal owner to continue this progress.”

Investment bank Citigroup served as exclusive financial advisor to Ardagh for the transaction, while Barclays acted as Consol’s sole financial advisor.

In February, Ardagh signed a definitive business combination agreement with special purpose acquisition company Gores Holdings V.

As part of the agreement, Gores Holdings V merged with Ardagh’s metal packaging business to form an independent public company, Ardagh Metal Packaging.