Verallia North America (VNA) looks set to be sold to Ardagh group for $1,694 billion (€1,275 billion).

VNA's owner Saint Gobain has been in negotiations with the Ardagh Group following the latter’s offer to acquire Verallia North America.

The transaction values VNA at 6.5 times 2012 earnings before interest, taxes, depreciation and amortisation of $261 million.

Verallia North America is the second largest glass container manufacturer in the USA, behind Owens-Illinois. The company has 13 plants across the country and employs more than 4,400 people. It has its headquarters in Muncie, Indiana and serves the North American wine, food and beverage industries.

It produces approximately 9 billion containers annually from its facilities and has annual revenues of approximately US$1.6 billion (€1.2 billion).

Pierre-André de Chalendar, Chairman and CEO Saint-Gobain, said: “The offer is a new milestone in Saint-Gobain’s strategic refocusing on the habitat sector. It puts a high value on our North American containers business, above the multiples contemplated at the time of the planned IPO in 2011, while providing it with promising scope for industrial development.

“If the deal is completed, the sale proceeds will be used mainly to strengthen the group’s balance sheet, while pursuing its acquisition policy focused on small or medium sized targets.

“At the same time, Verallia’s positions in Western and Eastern Europe, which were recently strengthened by a very promising operation in Algeria, together with its positions in growing Latin American markets, make it a global leader in its markets, with considerable cash generation and development potential.”

Paul Coulson, Ardagh Group Chairman, said the acquisition would increase the size of its glass business globally by almost 60% and be significant step in developin gits operations in the US. It would result in approximately 40% of Ardagh Group’s total sales and EBITDA being generated in the US.