The Federal Trade Commission is seeking to block Ardagh Group's planned acquisition of Compagnie de Saint-Gobain SA's SGO.FR +1.92%U.S. glass-bottle operations, saying the purchase would violate antitrust laws.
Ardagh, a glass and metal-packing company based in Luxembourg, announced the $1.7 billion deal in January, creating what would be the biggest U.S. supplier in the sector.
The FTC said Monday the deal would reduce competition and result in the merged company and rival Owens-Illinois Inc. OI -1.22%controlling more than 75% of the U.S. markets for glass containers for beer and liquor customers.
Ardagh expressed disappointment with the FTC's action and said the deal would benefit glass-container customers. It also said it will defend the deal in litigation, while working with the FTC to resolve its concerns.
The agency has authorized its staff to seek a temporary restraining order and preliminary injunction on the deal pending an administrative trial.
A representative from France's Saint-Gobain couldn't immediately be reached for comment.
"This combination would lead to higher costs for brewers and distillers and less innovation in the glass container industry," said Norman Armstrong Jr., deputy director of the FTC's bureau of competition. "Ultimately, this transaction will result in higher prices for consumers."
The FTC said glass-bottle prices have increased more than plastic bottle and aluminum can prices in recent years, as three manufacturers, including Ardagh and Saint-Gobain, have dominated the market. Reducing the number of competitors even more would make it much easier for two remaining companies to ratchet up prices, the FTC said.
Ardagh has been on a three-year North American buying spree since entering the U.S. market in 2010 after buying French can-manufacturing business Impress Group.
