South Africa: Ardagh acquires leading producer of glass packaging in Africa

Ardagh Group S.A., a Luxembourg-based producer of glass and metal products that has "grown in the past two decades into one of the world’s largest metal and glass packaging companies” announced today to acquire 100% of the ordinary shares of Consol Holdings Proprietary Limited, the leading producer of glass packaging on the African continent, for an equity value of ZAR 10.1 billion (USD 635 million).

Just one week ago, Ardagh Metal Packaging (AMP) announced to build a new state-of-the-art USD 200 million beverage can plant in Northern Ireland and to buy Hart Print, a Quebec (Canada) based innovator in digital printing services to the beverage market. (, 19.11.2021)

Ardagh currently operates 57 metal and glass production facilities in 12 countries mainly in Europe and the United States employing more than 16,000 people with sales of approximately EUR 6.2 billion (USD 7bn). The company has so far no own presence in Africa.

Following completion of the Consol acquisition which is subject to certain conditions, including regulatory approvals that are expected to be obtained in the second quarter of 2022, Ardagh will not only increase its global footprint but also strengthen its position among the world's largest beverage packaging companies.

Headquartered in Johannesburg, and founded in 1946, Consol is the market leader in South Africa, operating four glass production facilities. It serves a broad range of leading international, regional and domestic customers, principally in the beer, wine, spirits, food and non-alcoholic beverage sectors. Consol Holdings is the holding company for Consol Glass South Africa, Kenya, Nigeria and Juniper Glass in Ethiopia and has been producing glass packaging for over 75 years. Consol is the leading glass packaging manufacturer in sub-Saharan Africa by manufacturing capacity.

In the year to June 30, 2021, Consol reported consolidated revenues of ZAR 9.0 billion (USD 566 million). South Africa represented approximately 90% of revenues, with the balance represented by smaller production facilities in Kenya, Nigeria and Ethiopia.

South African investment company Brait Plc and other private investors have long been trying to exit their holding in Consol. In 2018, a planned IPO in Johannesburg was cancelled due to market conditions.

The agreed purchase price represents a 37% premium to the audited 31 March 2021 valuation of Brait’s interest in Consol and a 16% premium to Brait’s carrying value for Consol as at 30 September 2021.

The enterprise value of the transaction represents a multiple of approximately 6.6 times LTM Adjusted EBITDA to September 30, 2021. Ardagh expects to finance the acquisition through a combination of its own cash resources and the assumption of ZAR 5.7 billion (USD 358 million) existing net debt at Consol.

Glass consumption in Consol's markets is projected to continue to increase, driven by long-term trends, including population growth, rising income levels and shifts to premium one-way sustainable glass packaging.

Ardagh Chairman, Paul Coulson, commented
"We are very pleased to expand our European and North America presence in glass packaging into Africa with the acquisition of Consol, a high-quality business, led by an excellent management team. Consol is a market leader in the region, with great relationships across a diversified domestic and multinational customer base. Virtually all of Consol's multinational customers are also customers of Ardagh. We look forward to welcoming Consol to the Ardagh family and to investing in the long-term growth of the African market, driven by consumer trends and rising sustainability awareness."

Bruce MacRobert, Chairman of Consol, remarked that
"The Consol team has built a great business, with an established reputation for delivering quality products to a growing customer base. Ardagh's long-term presence in, and commitment to, glass packaging, makes it the ideal owner to continue this progress."

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