After failing in a bid for the Canadian assets of glassmaker Consumers Packaging, Irish glass bottle company Ardagh is in discussions on a possible purchase of Anchor Glass, the US company in which Consumers Packaging has a 60 per cent interest.

The Canadian assets of Consumers, which has been in the local equivalent of receivership, have been sold to US giant Owens Illinois for $253 million (€277 million). Ardagh chief executive Mr Eddie Kilty said Ardagh had made a higher bid for Consumers but that Owens Illinois had offered all cash and this was crucial to the outcome. Mr Kilty added that Ardagh would make a profit on the $36 million of Consumers bonds it bought ahead of its bid.

But with the Canadian business now being sold to Owens Illinois, Ardagh has switched its attention to Anchor Glass, the Florida-based group in which Consumers has a 60 per cent stake. These discussions are at an early stage, but if a deal is done it would nearly treble Ardagh's turnover to almost €1 billion (£790 million). But like Consumers, Anchor Glass is heavily indebted and any deal is likely to involve a sale price well below the $253 million-plus that Ardagh bid for Consumers' Canadian assets.

On the home front, the first half of 2001 has been difficult for Ardagh with a squeeze on margins affecting operations in Ireland and the UK. Overall, sales in the first half fell 7.7 per cent to €139.6 million. Earnings before interest, tax and depreciation was down 8.2 per cent to €33.5 million. Ardagh's pre-tax profits did rise to €6.6 million from €3.8 million but this was largely due to an exceptional profit on a property sale of €5.5 million.

Mr Kilty said trading in the first half had been tough but there were signs of an improvement in trading in the UK in the second half. He said the Irish market remained tough. Between Ardagh and its main Irish competitor, Quinn Glass, the Irish market was 21/2 times oversupplied, said Mr Kilty.