Africa’s glass manufacturing giant Consol finally finds new owner in global packaging major Ardagh Group

SOUTH AFRICA – Ardagh​​ Group, global supplier of sustainable, infinitely recyclable, metal and glass packaging for brand owners, has agreed to acquire Consol Holdings Proprietary Limited, the leading producer of glass packaging on the African continent, for an equity value of ZAR10.1 billion (US$635 million).

Headquartered in Johannesburg, and founded in 1946, Consol is the market leader in South Africa, operating four well-invested 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.

Ardagh expects to finance the acquisition through a combination of its own cash resources and the assumption of ZAR5.7 billion (US$358 million) existing net debt at Consol.

Completion of the acquisition is subject to certain conditions, including regulatory approvals that are expected to be obtained in the second quarter of 2022.

The deal will include operations spanning South Africa, Nigeria, Kenya and Ethiopia, enabling Ardagh expand its European and North America presence in glass packaging into Africa.

“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,” Bruce MacRobert, Chairman of Consol, remarked.

In the year to June 30, 2021, Consol reported consolidated revenues of ZAR9.0 billion (US$566 million).

South Africa represented approximately 90% of revenues, with the balance represented by smaller production facilities in Kenya, Nigeria and Ethiopia.

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.

According to Mordor Intelligence, the Africa glass bottle and container market is expected to register a CAGR of approximately 5.67% between 2021-2026.

Ardagh Chairman, Paul Coulson, commented, “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.”

The Luxembourg-based global packaging group operates 57 metal and glass production facilities in 12 countries, employing more than 16,000 people with sales of approximately US$7 billion.

It caters to beverage, food, pharmaceutical and personal care markets and its customers include the likes of Heineken and Perrier.

During the transaction, Citigroup acted as exclusive financial adviser to Ardagh, and Barclays acted as exclusive financial adviser to Consol.

Completion of the deal will mark end of Brait’s – Consol’s majority owner, pursuit to dispose the unit.

The private equity investors have been trying to exit their holding in Consol over a decade after they took it private in 2007 for ZAR 6.1 billion, worth around US$1 billion at the time.

They pulled a planned initial public offering in Johannesburg in 2018, citing challenging market conditions, but were weighing this as one option when they renewed exit attempts earlier this year.

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