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News 08.09.2010

O-I acquires Brazilian Glass Company

Owens-Illinois, Inc. (O-I) announced the acquisition of Brazilian glassmaker Companhia Industrial de Vidros (CIV), significantly expanding O-I’s reach in South America’s largest container market. CIV is the leading glass container producer in…

Owens-Illinois, Inc. (O-I) announced the acquisition of Brazilian glassmaker Companhia Industrial de Vidros (CIV), significantly expanding O-I’s reach in South America’s largest container market.
 
CIV is the leading glass container producer in northeastern Brazil, one of the country’s fastest-growing regions. The acquisition includes two plants in the state of Pernambuco and one in the state of Ceará and boosts O-I’s capacity in Brazil by approximately 50 percent. The plants employ approximately 1,300 people and produce glass containers for the beverage, food and pharmaceutical industries, as well as tableware.
 
Under the terms of the agreement, O-I is purchasing CIV’s glass container business for $603 million, which includes future tax benefits with an estimated present value of $140 million. These tax benefits include federal and state incentives for development in Brazil’s northeastern region. The all-cash transaction is closed.
 
In the first full year of operation, O-I expects the acquisition will boost regional net sales by approximately $200 million. The return on investment is expected to exceed O-I’s cost of capital. The purchase price reflects a 5.8 times EBITDA multiple for the first year of operation, excluding the present value of future tax benefits and including estimated net cost savings.
 

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