U.S. seeks more detail on Libbey's Anchor bid

7/24/2001

Federal anti-trust investigators want more information from Libbey, Inc., about its proposed $332 million acquisition of the Anchor Hocking glassware business, pushing back the deal's anticipated closing from this summer to the fourth quarter, Libbey announced yesterday.

Officials from the Federal Trade Commission and from the $442 million Toledo glassware company declined to elaborate on what additional information was requested.

Libbey announced June 18 it agreed to buy the Lancaster, Ohio-based Anchor Hocking business from Newell Rubbermaid, Inc., an acquisition that would increase annual revenues by about 50 percent.

“We're gathering the information as quickly as we can, and we would expect to comply with the request hopefully in the next six to eight weeks,” said Kenneth Wilkes, Libbey's vice president and chief financial officer. “We're hopeful we can clear these hurdles.”

Wall Street wasn't fazed by the news. Libbey's stock closed at 4 p.m. yesterday at $37 a share, up 47 cents, on the New York Stock Exchange.

Both Libbey and Anchor Hocking make a variety of glass items, but their biggest overlap is with drinking glasses.

Libbey glasses, however, primarily are sold to restaurants and other food-service customers; Anchor Hocking's mostly are sold in retail stores.

Asking companies for more information about proposed deals is not uncommon, said Mitch Katz, an FTC spokesman.

“Sometimes we just need additional information to make our decision,” he said. “It's not necessarily a bad thing.”

The FTC had required additional information for about 2 percent of transactions before February, when the threshold for deals requiring government approval increased from $15 million to $50 million, Mr. Katz said. That percentage is likely to increase because there will be fewer uncomplicated transactions to go through without further review, he said.

Described by analysts as a good fit, Libbey's planned acquisition of Anchor Hocking would add 10 cents to 15 cents a share in earnings in the first full year.

Plus, Libbey would save about $5 million in taxes annually for 15 years under the federal code expected to be used for the transaction. Yet Libbey's debt would nearly triple, from $178 million as of March 31 to $510 million.