Ardagh Group faces strong resistance in any efforts to recoup losses relating to a $50 million US patent ruling against a business it bought from French industrial giant Saint-Gobain two years ago.
A Delaware jury ordered last month that Ardagh, led by Irish financier Paul Coulson, pay $50.3 million (€46.1 million) to a company, Green Mountain, which claimed the group’s US glass unit infringed a patent over technology to turn mixed-colour glass into recycled glass of a single colour.
Ardagh said last week that it disagreed with the decision, planned to pursue all options, including appeal, and that, irrespective of the outcome, it is covered by an indemnity against the financial fallout from the former owners of the business.
However, a spokeswoman for the Paris-based company said: “Given the agreements between Ardagh and Saint-Gobain on the sale of Verallia North America, Saint-Gobain is not liable and the group is not involved in this litigation.”
A Saint-Gobain spokesman subsequently said, when further questioned by The Irish Times, that Ardagh group has no comeback in relation to the case under any indemnity agreement relating to the sale.
It is understood, however, that Ardagh is comfortable that it is appropriately covered and has filed notifications with the French group, which it paid $1.5 billion for the business in April 2014, in terms of warranties attached to the sale, following the US jury’s decision.
A spokesman for Ardagh declined to comment other than refer back to the company’s statement last week.
Ardagh completed the purchase of Verallia North America less than two weeks after Green Mountain lodged its legal complaint in the US in March 2014, according to court documents.
Mr Coulson made an attempt to buy the remaining Verallia operation from Saint-Gobain the following year. However, Ardagh’s bid was rejected as being too low. US private equity group Apollo subsequently acquired the business in a €2.95 billion deal.
Ardagh raised more than $350 million through an initial public offering last month by selling less than an 8 per cent stake in the business to new investors. The group, which is 33 per cent owned by Mr Coulson, has a market capitalisation of $5.1 billion.
Last week, Ardagh reported that its earnings before interest, tax, depreciation and amortisation rose 38 per cent in the first quarter of the year to €299 million. The results were bolstered by the impact of its largest-ever acquisition, the $3.42 billion purchase in June of a beverage cans business which was sold by US peer Ball Corp and the UK’s Rexam to appease competition authorities under their own merger.
Moody’s, one of the world’s largest credit ratings agencies, said on Wednesday that it expected Ardagh’s earnings to grow at about 7 per cent a year between 2015 and 2018, twice the rate of rivals, as it benefits from synergies from the Verallia North America and Ball-Rexam deals and more than $220 million of investment in its US metal packaging business.