German packaging company Gerresheimer has announced plans to take over the pharmaceutical business of troubled Glass Group Inc (GGI) of the US, after a Delaware bankruptcy court approved the transaction.
The acquisition comprises container glass works in Millville, New Jersey, which specialises in pharmaceutical packaging with sales of around $55 million (€46m), as well as GGI's 45.7 per cent share in the Chinese specialty glass manufacturer Beijing Wheaton. Gerresheimer's annual revenues came in at around €560 million last year.
GGI used to compete with Gerresheimer in the US pharmaceutical glassware sector, but was forced to file for bankruptcy protection at the end of February this year, blaming rising energy and raw-materials prices as well as healthcare costs.
The price paid for the assets now acquired totalled around $21.7 million, and closure of the deal is expected by 30 September. GGI manufactures pharmaceutical, cosmetic and specialty glass containers, and it is the largest producer of small, specialty molded glass containers in the US.
The purchase "marks a quantum leap on the way to establishing our Group as a leading worldwide supplier of pharmaceutical packaging," commented Dr Axel Herberg, CEO and president of Gerresheimer.
Through the acquisition Gerresheimer has expanded its already existing leadership position in wide areas of the US market to cover the entire pharmaceutical glassware spectrum, he said.
In the past, Gerresheimer has been strong in the tubular glass sector, but has had less of a presence in container glass for pharmaceutics with only one plant in the US.
"The plant in Millville now also makes the group the leader in the US for pharmaceutical container glass," said Gerresheimer in a statement. Because of its high quality requirements and therefore premium pricing, pharmaceutical glassware is generally regarded as a particularly attractive market segment.
The Millville plant has three furnaces producing various pharmaceutical glassware ranges, includinge the highly specialised type I borosilicate glass. Gerresheimer's acquisition will save at least 250 of the 400 union jobs at the plant, according to local press reports.
In addition to Millville, Gerresheimer currently has five production plants operated by its US subsidiary Kimble, plus a plant in Mexico.
Meanwhile, the acquisition of shares in Beijing Wheaton offers "an excellent starting base to establish a foothold in the Asian market," said Herberg.
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