Big move for Owens-Illinois and Vitro

Last week’s $2.2 billion acquisition of a major division of Mexican glassmaker Vitro by United States-based Owens-Illinois Inc. marks a big move for both companies.

The expectation of significant growth in Mexico’s bottling business is a main motivation for Owens-Illinois, which during the past year has seen a decline of nearly a third of its stock price, largely because of a slowdown in its Asian business.

With the acquisition, Owens-Illinois gets Vitro’s food and beverage glass container operations, with five plants in Mexico and another in Bolivia.

For its part, Vitro will use proceeds from the sale to buy back bonds, on which it had paying been a high rate of interest, while engaged in a long court battle with creditors.

Founded in Monterrey in 1909, Vitro became a Mexican icon, with production facilities in Mexico and Bolivia, and distribution services in the United States.

The sale does not include Vitro’s cosmetics business, its machinery and equipment division, or its participation in Panama-based Comegua, which produces glass bottles and containers for distribution in mainly in Central America.

On the day of the sale, Owens-Illinois shares were up 10 percent at $26.16 on the New York Stock Exchange.

Vitro shares were up nearly 25 percent at 43.19 pesos on Mexico’s Bolsa.