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Ardagh Plans to Buy Rexam Glass for 660 Million Euros

March 12, 2007

Ardagh Glass Ltd., a closely held bottle maker with plants in the U.K., Germany and Italy, agreed to buy Rexam (REX) Plc's glass unit for 660 million euros ($869 million) to double in size.

The division produces bottles and jars for the beverage, food and drug industries. It had sales of 437 million pounds ($849 million) in 2006, according to a statement released today by London-based Rexam. Ardagh, based in Dublin, said in a separate statement that it will get a 338 million-euro loan to help fund the purchase.

Ardagh Chairman Paul Coulson said that the purchase will give the company 18 percent of the European glass-container market. Rexam, whose clients include Coca-Cola Co. and PepsiCo Inc., said it's selling the unit to focus on its main business of making cans and to cut debt that has risen to 1.3 billion pounds ($2.5 billion) over the past five years.

``Ardagh will double in size and become the No. 3 glass- container manufacturer in Europe,'' Coulson said in the statement.

Ardagh's loan is being provided by a group led by Anglo Irish Bank Plc, according to its statement. The company will also receive a 300 million-euro bridge loan arranged by Citigroup Inc. (C:US) and 150 million euros as a revolving credit facility from the Anglo Irish Bank syndicate. Citigroup advised the company.

After the completion of the transaction, Ardagh said it plans to refinance the Citigroup bridge loan through a sale of debt.

Rexam Glass employs 3,600 people and has 13 glassworks in Denmark, Germany, the Netherlands, Poland and Sweden, according to the Rexam Web site. Ardagh has nine plants in Germany, Italy, Poland and the U.K., and 3,300 employees.

Shares of Rexam rose 5.5 pence, or 1.1 percent, to 525.5 pence in London, giving the company a market value of 3.07 billion pounds.

Rexam, the world's largest maker of beverage cans, had total sales of 3.73 billion pounds last year. The company also makes plastic packaging for the drug, beauty and beverage industries.

To contact the reporter on this story: Adam Mitchell in London at

To contact the editor responsible for this story: Justin Carrigan at

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