RIG A 

UNITED STATES OF AMERICA 

BEFORE FEDERAL TRADE COMMISSI 

) 

ln the Matter of ) 

) 

ARDAGH GROUP, S.A. ) 

a public limited liability company, ) 

) 

SAINT-GOBAIN CONTAINERS, INC. ) 

a corporation, ) 

) 

and ) 

) 

COMPAGNIE DE SAINT -GOBAIN, ) 

a corporation. ) 

) 

~~~ 

APR 2 4 2014 

PUBLIC VERSION 

Docket No. D-9356 

APPLICATION FOR APPROVAL OF DIVESTITURE OF ANCHOR GLASS BUSINESS 

TO GLASS CONTAINER ACQUISITION LLC 

Pursuant to Section 2.4l(f) of the Federal Trade Commission ("Commission") Rules of 

Practice and Paragraph II of the Decision and Order ("D&O") accepted for public comment by 

the Commission on April 8, 20 14, in the above-captioned matter, Respondent Ardagh Group 

S.A. ("Ardagh") respectfully submits this Application for Approval of Divestiture ofthe Anchor 

Glass Business ("Application") to Glass Container Acquisition LLC ("GCA"), an affiliate of 

KPS Capital Partners L.P. ("KPS"). 

I. Background 

On January 17, 2013, Ardagh entered into an agreement with Compagnie de Saint-Gobain 

(together with Ardagh, "Respondents") to purchase Saint-Gobajn Containers, Inc., Saint-Gobain's 

U.S. glass container operations. On July l, 2013, the Commission issued an administrative 
PUBLIC VERSION 

Complaint against the Respondents, alleging that the acquisition would have anticompetitive effects 

in alleged markets for glass bottles for beer and glass bottles for spirits. On March 18, 2014, the 

Commission entered an Order Withdrawing Matter from Adjudication for the Purpose of 

Considering a Consent Proposal. On March 24, 2014, Respondents executed an Agreement 

Containing Consent Orders ("Consent Agreement") that included an Order to Hold Separate and 

Maintain Assets ("Hold Separate Order") and a 0&0, which, if approved, would require Ardagh to 

divest the Anchor Glass Business (as defined in the 0&0) to an acquirer approved by the 

Commission. On April 8, 2014, the Commission accepted the 0&0 for public comment. On April 

1 I, 2014, Ardagh closed its acquisition of Saint-Gobain Containers, Inc. 

This Application seeks approval of the proposed divestiture of the Anchor Glass Business 

to GCA. Ardagh wishes to complete the proposed divestiture of the Anchor Glass Business as 

soon as possible. Prompt consummation of the proposed divestiture will further the purposes of 

the D&O and is in the interest of the Commission and the public interest. 

II. Request for Confidential Treatment 

This Application contains confidential and competitively sensitive information relating to 

Ardagh, the divestiture of the Anchor Glass Business, and the proposed Acquirer. Pursuant to 

Sections 6(t) and 21(c) of the Federal Trade Commission Act, 15 U.S.C. §§ 46(t) and 57b-2(c), 

and Sections 2.41(t), 4.9 and 4.10 the Commission's Rules of Practice and Procedure, 16 C.F.R. 

§§ 2.4l(t), 4.9 and 4.10, Ardagh requests that nonpublic, commercially or competitively 

sensitive information contained in this Application be treated by the Commission as strictly 

confidential and not be made available to the public. The disclosure of this information would 

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PUBLIC VERSION 

prejudice Ardagh and GCA, cause harm to the ongoing competitiveness of the Anchor Glass 

Business, and impair Ardagh's ability to comply with its obligations under the D&O. Ardagh 

requests that the Commission inform it immediately if the Commission cannot treat the 

confidential information contained in this Application as confidential in order to provide Ardagh 

an opportunity to seek relief. 

For the convenience of maintaining the public record, Ardagh is submitting two versions 

of this Application. The confidential version contains the information necessary to enable the 

Commission to assess the Application. The public version has been redacted to exclude 

confidential and proprietary information. 

III. The Proposed Divestiture 

On April 12, 2014, Ardagh agreed to sell the Anchor Glass Business to GCA pursuant to 

a Stock Purchase Agreement among Ardagh Containers Holdings Limited, Anchor Glass 

Container Corporation, GCA and Ardagh (the "SPA"). A copy of the SPA, including all 

schedules and exhibits, is attached as Confidential Exhibit A. 

As consideration, GCA will pay Ardagh REDACTED at closing, subject to certain 

purchase price adjustments, including adjustments for (i) certain employee benefits liabilities, (ii) 

closing indebtedness, (iii) company transaction expenses, (iv) closing cash and (v) working 

capital overages (if any) or shortages (if any). The mechanism for determining the adjustments to 

the purchase price is contained in Article II of the SPA. 

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PUBLIC VERSION 

As provided in Section IV below, the proposed Acquirer, GCA, owned and controlled by 

an affiliate of KPS, will have the necessary operational, managerial, financial and professional 

resources to ensure that the Anchor Glass Business will continue to be operated as a competitive 

glass container manufacturing business in the United States. The proposed divestiture conveys 

all of the Anchor Glass Business's assets, including: a headquarters in Tampa, Florida and a 

complete senior management team, six glass manufacturing facilities located in Florida, Georgia, 

Indiana, Minnesota, New York and Oklahoma, an engineering and spare parts facility in Illinois, 

a mold manufacturing facility in Ohio and approximately 2,000 employees. Consequently, the 

proposed divestiture will accomplish the purposes of the D&O by creating an independent, 

viable, and effective competitor in the relevant markets, and thus will remedy any lessening of 

competition resulting from Ardagh's acquisition ofSaint-Gobain Container, Inc. as alleged in the 

Commission's Complaint. 

IV. The Proposed Acquirer is Well-Qualified to Own and Operate the Anchor Glass 

Business 

A. Introduction to KPS Capital Partners, LP 

KPS is the manager ofthe KPS Special Situations Funds, a family of investment funds 

with over $6.0 billion of assets under management. KPS seeks to realize significant capital 

appreciation by making controlling equity investments in companies across a diverse range of 

manufacturing industries. The KPS investment strategy is based primarily upon partnering with 

top management teams and improving the operations of businesses. Thereafter, upon achieving 

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PUBLIC VERSION 

stability and profitability, KPS focuses on growing its businesses, both organically and through 

strategic acquisitions. 

Since 1991, KPS has worked exclusively on acquiring and improving industrial 

businesses. KPS has completed over 50 transactions through four investment funds. KPS 

acquires very few new businesses each year, and every investment that KPS makes is subject to 

thorough due diligence and reflects its deep interest in preserving the firm's strong reputation 

and long-term track record of success. Each of the businesses KPS acquires faces a unique set of 

challenges and opportunities, and KPS develops business plans that are both responsive to those 

challenges and sufficiently flexible to adapt to ever-changing market conditions and new 

opportunities. KPS's strategy has resulted in every KPS Fund being a top performer relative to 

other funds in its vintage year. 

KPS current portfolio companies have aggregate annual revenues of nearly $7.0 billion, 

operate 93 manufacturing facilities in 26 countries, with approximately 37,000 employees, 

directly and through joint ventures worldwide. The KPS investment strategy and portfolio 

companies are described in detail at www.kpsfund.com. 

B. KPS Has Completed a Comprehensive Due Diligence Investigation of the Anchor 

Glass Business 

Over the past six months, KPS has completed a comprehensive due diligence 

investigation of the Anchor Glass Business. KPS has spent a considerable amount of time and 

committed a significant amount of internal and external resources to evaluating the Anchor Glass 

Business. In connection with its due diligence investigation ofthe Anchor Glass Business, KPS 

retained the following third-parties: Paul, Weiss, Rifkind, Wharton & Garrison LLP (legal), 

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PUBLIC VERSION 

Ernst & Young Transaction Advisory Services (accounting I tax I IT), PricewaterhouseCoopers, 

LLP (human resources I benefits), Spilman Thomas & Battle PLLC (union I human resources I 

benefits), Aon Risk Services Central, Inc. (insurance) and ENVIRON International Corporation 

(environmental). KPS's diligence investigation included: (a) reviewing the books and records of 

the Anchor Glass Business; (b) participating in numerous meetings and conference calls with 

members of the Anchor Glass Business management team; (c) conducting facility tours of all of 

the Anchor Glass Business's glass container manufacturing facilities; (d) engaging glass industry 

experts to assist in its evaluation of the Anchor Glass Business; (e) completing its business, 

accounting, tax, legal, environmental, human resources and benefits, insurance and information 

technology due diligence and (f) developing a detailed business plan for the Anchor Glass 

Business. KPS's comprehensive due diligence investigation of the Anchor Glass Business and 

development of a detailed business plan with the management team will position the Anchor 

Glass Business for long-term success in the U.S. glass container market place. 

C. KPS Has Relevant Industry and Transaction Experience 

KPS has significant experience owning and operating businesses in Anchor's key endmarkets in North America. Most relevant to the Proposed Divestiture is KPS's acquisition of 

North American Breweries, Inc. ("NAB"). In 2009, KPS established a platform company in the 

branded consumer beverage business, NAB. Headquartered in Rochester, NY, NAB is a national 

platform for investments and growth in the beer and malt beverage industries. NAB 

manufactures, imports, markets and sells its branded product portfolio through an independent 

network of wholesalers throughout the U.S. NAB's portfolio of brands includes: the Labatt 

brands; the Genesee brands; the Original Honey Brown Lager and Dundee Ales & Lagers; 

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PUBLIC VERSION 

Seagram's Escapes; Magic Hat; Pyramid; and MacTarnahan's. In December 2012, KPS 

completed the sale of NAB to Cerveceria Costa Rica, S.A. Through KPS's investment in NAB, 

KPS gained considerable experience and insight into the end-market dynamics impacting the 

Anchor Glass Business. Of note, NAB's Rochester, NY facility sources its glass bottle 

requirements from the Anchor Glass Business's Elmira, NY facility, and has cited the Elmira 

facility as one of its top-ranking suppliers. 

In addition to KPS's relevant industry experience, KPS has extensive expertise buying 

divisions of larger corporations and successfully building independent standalone businesses. 

Since its founding, KPS has completed over 20 corporate carve-out transactions. Many of these 

acquisitions involved business lines that are leaders in their respective industries and many of 

these businesses operate globally. KPS has been successful in dealing with many complex 

separation issues and understands the level of coordination often required between buyer and 

seller post-closing. 

KPS's relevant industry and transaction experience will ensure the continued growth and 

development of the Anchor Glass Business. 

D. KPS Focuses on Operational Improvement Opportunities 

KPS expends a significant amount of time and resources working with management 

teams to improve the operations of its portfolio companies. KPS makes significant investments 

in instituting structured continuous improvement programs and developing the human resources 

of its portfolio companies (including both people and training). As such, KPS will work with the 

Anchor management team to improve supply chain management, labor productivity and capacity 

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PUBLIC VERSION 

utilization to ensure that Anchor remains an industry leader in terms of quality, customer service 

and delivery metrics. 

E. KPS has Substantial Capital Available to Support the Proposed Divestiture and 

Future Organic and Strategic Growth Initiatives 

KPS is currently investing out of its fourth investment fund, KPS Fund IV, a $3 .57 billion 

investment vehicle. The Anchor Glass Business will be a platform investment in Fund IV, which 

has a seven year investment period, and will be an entirely independent and standalone 

investment from any of KPS's other portfolio companies. As a Fund IV platform investment, 

Anchor Glass will have access to a significant amount of capital in Fund IV to fund the 

acquisition, support the company's continued growth and fund future add-on acquisitions. KPS 

will look to create value through partnering with Anchor's management team to pursue organic 

and strategic growth initiatives. KPS will provide Anchor with the capital necessary to support 

capacity expansion opportunities and to support strategic acquisitions both domestically and 

internationally. KPS has sufficient financial resources to close the Proposed Divestiture and to 

support the future development of the Anchor Glass Business. 

F. KPS Works Constructively with Unions 

Approximately 83% ofthe 1,950 Anchor Glass employees are represented by two unions, 

the Glass, Molders, Pottery, Plastics, and Allied Workers International ("GMP") union and the 

United Steelworkers ("USW") union. For over twenty years, KPS has worked constructively 

with the major industrial and service unions in North America. In all of the transactions that 

KPS has completed where unions were present, KPS received their strong support. KPS has 

completed many transactions in which the cooperation of unions was a key component in 

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PUBLIC VERSION 

ensuring the long-term success of the business. Most recently, in connection with the acquisition 

of Expera, 1,300 USW represented employees overwhelmingly ratified three new collective 

bargaining agreements. 

G. The Management Team of the Anchor Glass Business Is Highly Capable and 

Experienced 

The existing management team of the Anchor Glass Business (the "Management Team") 

will continue to operate the business under KPS ownership. The Management Team has a 

demonstrated track record of investing in and growing the business and earnings. The 

Management Team has successfully executed on a strategic plan that has yielded measureable 

results in the form of improved financial performance. With over 1 02 years of combined glass 

industry experience, the Management Team will ensure that Anchor Glass will operate as a 

viable and effective competitor in the US marketplace. The Management Team includes Jim 

Fredlake as ChiefExecutive Officer, Ken Wilkes as Chief Financial Officer, Gene Gavin as 

Senior Vice President of Manufacturing and Gordon Love as Vice President of Sales. 

Chief Executive Officer James Fred lake has been with the Anchor Glass Business since 

2006, first as head of Anchor Glass Container Corporation and then of Ardagh Glass Americas 

since August 2012. From August 2006 to September 2009, he was Anchor's Executive Vice 

President and Chief Financial Officer. Prior to joining Anchor Glass Container Corporation, Mr. 

Fredlake held various financial and operating roles, lastly as Chief Financial Officer of Alcoa 

Fujikura Limited. Ken Wilkes, the Chief Financial Officer, has been with the Anchor Glass 

Business since 2010. Mr. Wilkes has served as Chief Financial Officer of Ardagh Glass 

Americas since August 2012 and as Executive Vice President and Chief Financial Officer of 

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PUBLIC VERSION 

Anchor Glass Container Corporation since early 2010. Prior to his joining the Anchor Glass 

Business, Mr. Wilkes was at Libbey Glass, where he was responsible for international operations 

and led its global expansion. Gene Gavin, Senior Vice President of Manufacturing of Ardagh 

Glass Americas since August 2012, has been in various leadership roles at Anchor Glass 

Container Corporation since 1980, in several plants and at the corporate headquarters. Mr. Gavin 

has been instrumental in improving the efficiency of Anchor Glass manufacturing facilities, 

improving yields and reducing cost. Gordon Love has served as Vice President of Sales of 

Ardagh Glass Americas since August 2012 and as Vice President of Sales of Anchor Glass 

Container Corporation since 1997. Mr. Love has more than 39 years of experience in the glass 

packaging industry. The Anchor Glass Business also benefits from a deep bench of management 

talent in addition to its executive officers. 

V. The Proposed Divestiture Conveys All the Assets Required to be Divested and is 

Consistent with the Terms and Purposes of the Order 

A. The Proposed Divestiture is Consistent with the Terms of the Order 

Paragraph II ofthe D&O requires the divestiture of the Anchor Glass Business no later 

than one hundred eighty (180) days from the date Ardagh signed the Agreement Containing 

Consent Order. 

The transaction described in the SPA conveys all of the Anchor Glass Business as 

described in Paragraph I.F of the D&O. Section 2.01 of the SPA provides for the purchase and 

sale of the "Shares," which are defined as all the issued and all of the issued and outstanding 

shares of capital stock of Anchor Glass Container Corporation, a Delaware corporation (the 

"Company"). The Company owns or possesses the right to use all the assets used by, necessary 

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PUBLIC VERSION 

for, or relating to the Anchor Glass Business, owns all Books and Records used by, necessary 

for, or relating to, the Anchor Glass Business, and is party to the contracts used by, necessary for, 

or relating to the Anchor Glass Business. 

The Company also owns, and the SPA conveys, all the Intellectual Property used by, 

necessary for, or relating to, the Anchor Glass Business. Specifically, Section 4.14(c) of the SPA 

provides that, subject to certain assumptions, the Company shall continue to have the rights to 

use all Licensed Intellectual Property licensed to the Company under the material Company IP 

Agreements on substantially identical terms as the Company enjoyed prior to Closing. Pursuant 

to Section 6.13 ofthe SPA and the Form of License Agreement, attached to the SPA as Exhibit 

C, Ardagh agrees to grant a license to GCA to use certain software following the closing. 

Paragraph II.B of the 0&0 requires, at the request of the Acquirer, that Ardagh provide 

Transitional Assistance to GCA for a period not to exceed one year from the date of divestiture. 

Consistent with the D&O, Section 6.12 ofthe SPA and the Form ofTransition Services 

Agreement, attached as Exhibit B of the SPA, provide operational, environmental and IT systems 

services sufficient to enable GCA to operate the Anchor Glass Business in substantial the same 

manner as prior to the Acquisition. 

Paragraph II.D of the D&O requires Ardagh to maintain the full economic viability and 

marketability of the Anchor Glass Business, to minimize the risk ofloss of competitive potential 

for the Anchor Glass Business, to prevent the destruction, removal, wasting, deterioration, or 

impairment of any of the assets related to the Anchor Glass Business, and prevents Ardagh from 

selling, transferring, encumbering or otherwise impairing the Anchor Glass Business. In Section 

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6.0 I of the SPA, from the date of execution of the SPA until closing, the Company agrees to 

conduct business in the ordinary course in all material aspects and to use its commercially 

reasonable efforts to keep available the services of its managerial Employees and to preserve its 

relationships with customers, suppliers, contractors or other third parties required to operate the 

Anchor Business, in each case, in the ordinary course of business consistent with past practice of 

the Company. 

Paragraph II.F of the D&O provides that, for a period oftwo years after the divestiture of 

the Anchor Glass Business, Ardagh shall not solicit employment of any person employed by 

GCA. Sections 6. 11 (a) and (b) of the SPA complies with this Paragraph by preventing Ardagh 

and its affiliates from soliciting senior level employees of the Anchor Glass Business for a period 

of three years following closing of the divestiture. 

Paragraph III of the D&O provides that Ardagh employees shall not receive, have access to, 

use or continue to use, or disclose any Confidential Business Information pertaining to the 

Anchor Glass Business other than as permitted under the D&O. Section 6.03 of the SPA 

prevents Ardagh and its affiliates from using any and all non-public and otherwise confidential 

information for a period of three years following closing ofthe divestiture. 

B. The Proposed Divestiture is Consistent with the Purpose of the Order 

Paragraph II.G of the D&O provides, inter alia, that the purpose of the divestiture of the 

Anchor Glass Business is to ensure the continued use of the assets of the Anchor Glass Business 

in the same businesses in which such assets were engaged at the time of the announcement of the 

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PUBLIC VERSION 

Saint-Gobain Acquisition by Ardagh, to minimize the loss of competitive potential for the 

Anchor Glass Business, and to remedy the lessening of competition resulting from the 

Acquisition as alleged in the Commission's Complaint. By divesting the Anchor Glass Business 

as contemplated by the D&O, the proposed divestiture will ensure that the Anchor Glass 

Business will continue to be operated as a viable and effective competitor in the sale of glass 

containers to brewers and distillers in the United States. As discussed in Section IV above, KPS 

has the financial capability and the necessary experience to operate a viable, competitive glass 

container business. Moreover, the Anchor Glass Business management team has the necessary 

experience to operate the Anchor Glass Business. In short, as GCA has the ability to create and 

operate an independent, viable and effective competitor in the glass container industry in the 

United States, Ardagh's sale of the Anchor Glass Business to GCA will remedy the competitive 

harm alleged in the Complaint. 

VI. Conclusion 

Because the proposed divestiture of the Anchor Glass Business to GCA is procompetitive, in the public interest and addresses the competitive concerns raised in the 

Complaint and the D&O, and for the additional reasons set forth above, Ardagh respectfully 

requests that the Commission approve GCA as the Acquirer of the Anchor Glass Business, the 

SPA and the transactions contemplated thereby. 

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Dated: April24, 2014 

PUBLIC VERSION 

Respectfully submitted, 

14 

Wayne Dale ms 

Shearman & Sterling LLP 

599 Lexington Avenue 

New York, New York 10022 

Counsel for Ardagh Group, SA. 
PUBLIC VERSION 

CONFIDENTIAL EXHIBIT A 

(Stock Purchase Agreement among Ardagh Containers Holdings Limited, Anchor Glass 

Container Corporation, Glass Container Acquisition, LLC and, solely with respect to 

Section 12.13, Ardagh Group S.A. ) 

[REDACTED FROM PUBLIC VERSION] 

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