Verallia IPO will drive expansion says Saint-Gobain

06-Jun-2011 - Last updated on 07-Jun-2011 at 11:13 GMT

Related tags Initial public offering

Saint-Gobain announced today it is launching the initial public offering (IPO) of Verallia, its glass packaging arm, a move that will enable the group to enhance its expansion strategy, said the firm.

The group is expecting to raise between €785m and €958m from the listing of a 40 per cent stake of Verallia’s share capital and voting rights.

Trading Verallia's shares on the regulated market of NYSE Euronext in Paris will give the company access to new sources of financing and raise its profile among customers, said Saint-Gobain.

Verallia’s growth

In terms of growth, Verallia has a double footprint in both mature and developing markets, a source close to the firm told FoodProductionDaily.com.

In mature regions, the firm’s focus is mainly on premium products (wine and spirits) and expanding its market share.

In emerging markets the aim is to grow, according to the source. For example, the firm is constructing a new oven in Argentina and is currently in process of privatising an Algerian glass manufacturing plant.

The firm’s mid-term focus includes India, which has an “interesting” spirits market.

Long-term strategies could include China, said the source, which in the short-term (2010/2013) is not currently on the map for Verailla as there is currently no premium market since all premium bottled goods are imported, the source explained.

However, if this changes China may be of future interest to the company, the source added.

The indicative offering price range for the Open Price Offer and the Global Placement is between €29.50 and €36.00 per share. However, a further six per cent of share capital could be sold if demand is high enough, said the firm.

Initial announcement

Saint-Gobain unveiled its intention to float in April.

The announcement by Saint-Gobain did not come as a surprise to the industry, as the company had revealed a strategy to focus on the habitat and construction market as early as 2007.

But in 2008, CEO Pierre-Andre de Chalendar postponed an attempt to sell the unit because of the onset of the financial crisis.

“After three difficult years, the general business environment in 2011 is more likely to ensure that the packaging sector – which demonstrated its fundamental robustness during the crisis – will be valued at a price that reflects its true worth,” said Chalendar.