Leading privately owned packaging and resource recovery company Visy will acquire the Australian and New Zealand glass manufacturing business of Owens Illinois in a deal worth almost A$1 billion.
Anthony Pratt, Visy Executive Chairman, announced on Thursday July 16 that Visy had entered into a definitive agreement with Owens Illinois (O-I) to acquire OI’s factories in Melbourne, Sydney, Brisbane, Adelaide and Auckland under a $947 million transaction.
O-I is the largest manufacturer of glass bottles and containers in Australia-New Zealand with factories in all capital cities of both nations.
O-I and Visy have agreed that the sale of the O-I ANZ business unit will be completed in two separate transactions.
O-I has entered into a sale-leaseback agreement with Charter Hall for certain properties valued at approximately AUD $214 million, a leading property management company, as well as an agreement to sell the O-I ANZ business to Visy for approximately AUD $733 million.
The deal, which is expected to be completed by the end of July, is one of the biggest manufacturing acquisitions by an Australian owned business in Australian business history.
Pratt said manufacturing has never been more important to Australia’s future.
“Importantly we will bring Visy’s sustainability culture to O-I, aiming to increase recycled content of glass bottles from 1/3 to 2/3,” he said.
After evaluating alternatives for the ANZ business, O-I determined the best option was to sell the operation to a buyer who could build on the solid business O-I has developed and bring decades of experience and expertise in closed loop packaging and recycling solutions, aligned to customer and industry needs.
Andres Lopez, O-I CEO said the sale of its ANZ operations is consistent with the company’s strategy to properly align our business with the interests of global customers, improve financial flexibility and maximize shareholder value.
“The sale of ANZ follows an in-depth strategic review of our global business portfolio and operating structure which is now substantially complete following this transaction,” he said in a statement.
“O-I’s ANZ business is known for providing the highest quality glass containers that enhance its customers’ brands. Following a robust sales process, we believe Visy is the best fit for our ANZ business, our customers and our employees.”
Post acquisition, Visy would employ 7200 people in well paying manufacturing jobs.
“The addition of glass manufacturing to Visy’s portfolio is in line with the company’s long-term strategy of creating local manufacturing job opportunities and supporting local communities,” the company said in a statement on Tuesday.
“Visy is committed to investing in creating sustainable packaging solutions for a better world.”
Both transactions have already received the proper regulatory approvals and closing is expected by August 31, 2020.