PERRYSBURG, Ohio (AP) -- Owens-Illinois has acquired Brazilian glassmaker Companhia Industrial de Vidros for $603 million, expanding the U.S. company's reach in South America.
Owens-Illinois said the purchase includes future tax benefits with an estimated present value of $140 million. The benefits include federal and state incentives for development in Brazil's northeastern region, where CIV is the leading glass container producer.
Owens gets two plants, one in the state of Pernambuco and one in the state of Ceara. Together, they employ about 1,300 workers producing glass containers for the beverage, food and pharmaceutical industries, as well as tableware. The acquisition is expected to boost the company's production capacity in Brazil by about 50 percent.
The company said it expects the acquisition will boost regional net sales by about $200 million in the first full year of operation.
The transaction "directly supports our strategy of expanding our presence in emerging markets with robust earnings growth potential," Owens-Illinois Chairman and CEO Al Stroucken said.
The company recently expanded operations in Argentina, China, Malaysia and Vietnam, and opened new glassmaking furnaces in Peru and New Zealand.
Shares of Owens-Illinois Inc., which closed the all-cash transaction Wednesday, gained 66 cents, or about 2.5 percent, to rise to $27.16 in Thursday afternoon trading.
