The Ardagh Group, the Luxembourg-based packaging firm run by Paul Coulson, is in settlement talks aimed at saving a proposed $1.7 billion deal to buy the American business of Saint-Gobain unit Verallia in time to meet a mid-January deadline, according to court documents.

The US Federal Trade Commission has filed a complaint against Ardagh, saying the deal for Verallia North America, a rival glass bottle manufacturer, is illegal, but the two sides appear to be finding common ground.

An FTC judge postponed pre-hearing conference yesterday, saying that the “parties are actively involved in settlement negotiations”. A second hearing, which had been scheduled for Thursday, was postponed until April.

Beer and liquor bottles
Ardagh offered on December 11th to sell six plants that make beer and liquor bottles, which it acquired in 2012, Ardagh and the FTC said in a joint motion made public yesterday.

“Complaint counsel [FTC] is not prepared to recommend the settlement proposal to the commission at this time, but believes the proposed divestitures [unlike the previous proposals] could, if the appropriate conditions are met, lead to a recommendation that the commission accept a consent settlement agreement,” the two sides said in the document.

Big divestiture
The deal, if it happens, will be a big victory for the FTC because of the size of Ardagh's divestiture, said antitrust expert Allen Grunes of the law firm Geyer Gorey LLP.

“This signals that a negotiated resolution is happening,” said Grunes. “They’re [the FTC] doing everything but saying yes.”

If Ardagh does not close the acquisition by January 13th, it will have to repay in full the bond offering that backed the deal, and launch a new debt offering. – (Reuters)