Owens-Illinois, Inc. (O-I) has announced the acquisition of Brazilian glassmaker Companhia Industrial de Vidros (CIV), significantly expanding its reach in the Brazilian container market.
The acquisi…
Owens-Illinois, Inc. (O-I) has announced the acquisition of Brazilian glassmaker Companhia Industrial de Vidros (CIV), significantly expanding its reach in the Brazilian container market. The acquisition includes two plants in the state of Pernambuco and one in the state of Ceara, thus boosting O-I“s capacity in Brazil by about 50%. The plants employ approximately 1,300 people and produce glass containers for the beverage, food and pharmaceutical industries, as well as tableware. As per the agreement, O-I is purchasing CIV“s glass container business for USD 603 million, including future tax benefits with an estimated present value of USD 140 million. These tax benefits include federal and state incentives for development in Brazil“s north-eastern region. The all-cash transaction closed on 1 September. O-I expects the acquisition will boost regional net sales by approximately USD 200 million during the first full year of operation, with return on investment expected to exceed O-I“s cost of capital. The acquisition of this well-managed company in South America – our fastest-growing and most profitable region – directly supports our strategy of expanding our presence in emerging markets with robust earnings growth potential, said Al Stroucken, O-I chairman and CEO. Our recent expansions in Argentina, China, Malaysia and Vietnam, as well as the opening of new furnaces in Peru and New Zealand, clearly demonstrate our commitment to these rapidly growing regions and the opportunities they offer. According to O-I South America President Andres Lopez, the expanded Brazilian footprint also aligns with unfolding consumer trends and customer growth plans. Economic development and increased consumer purchasing power is driving significant growth in the Brazilian container market. Our customers are expanding their operations, and this acquisition enables us to serve them, as well as new customers, more effectively. After we“ve implemented our advanced technology and lean manufacturing principles, we fully expect to boost productivity in the new plants, said Lopez.