Glass and metal packaging solutions provider Ardagh Group has made a binding offer worth €1.275bn ($1.7bn) to French-based Compagnie de Saint-Gobain, to purchase its glass packaging division, Verallia North America (VNA).
According to Ardagh, a meeting of its works council has been convened by Saint-Gobain to hold mandatory consultations in relation to the offer.
The transaction, which is subject to US regulatory approval, is expected to close in later part of 2013.
Ardagh Group chairman Paul Coulson said the acquisition of VNA is expected to add scale, diversity and value to the company's global packaging operations.
"The transaction would increase the size of our glass business globally by almost 60% and be a very significant step in developing our operations in the US. It would result in approximately 40% of Ardagh Group's total sales and EBITDA being generated in the US," Coulson said.
VNA acquisition is also said to allow Ardagh to expand its glass operations into the wine sector in the US for the first time, enabling the company to provide improved levels of service to its customers through the achievement of better operational efficiencies.
Ardagh also plans to raise a total of $1.45bn equivalent of debt financing through the issue of senior secured notes and senior notes and will use the proceeds to pay the cash consideration for the acquisition as well as certain costs.
Luxembourg-based Ardagh Group will operate out of 113 facilities in 26 countries and is expected to have global sales of more than €5.4bn, after completing the transaction.
US-based VNA, which produces about nine billion containers annually from its 13 facilities, serves the North American wine, food and beverage industries.