Rich Lister Anthony Pratt says ”manufacturing has never been more important to Australia’s future” as his Visy group agreed to pay $733 million to acquire the Australasian glass bottle manufacturing assets of United States group Owens-Illinois.
Owens-Illinois is exiting the Australasian market after 22 years as the biggest glass bottle maker, supplying a range of beer, wine and soft drink bottles along with glass containers to food groups.
Part of the overall $947 million transaction involves property group Charter Hall acquiring some of the Owens-Illinois properties in a $214 million sale-and-leaseback deal.
The expansion has been fuelling rising wealth for the Pratt family, which had an estimated wealth of $17.4 billion in May, a gain of more than $4.4 billion over just three years.
Yet despite his family’s rising fortunes it hasn’t been enough to keep pace with soaring wealth piles for Mr Pratt’s friend Gina Rinehart, who was ranked Australia’s wealthiest person in May. Fellow iron ore magnate Andrew Forrest is also racing up the Financial Review Rich List.
Not long after Mr Pratt announced his deal, Fortescue Metals Group shares hit a record $16.24, helping push Mr Forrest’s estimated net wealth beyond $20 billion for the first time. His stake in Fortescue was worth $18.1 billion on Thursday. It’s a staggering jump in wealth, with Mr Forrest ranked 8th on last year’s Financial Review Rich List, with an estimated wealth of $7.99 billion.
The Visy acquisition will help bolster Mr Pratt’s place on the Rich List, which will be published later this year. His family slipped to sixth spot following an analysis of the country’s wealthiest 20 people by The Australian Financial Review in May.
Mr Pratt was not available for comment but said in a statement that he planned to increase Owens-Illinois’ recycled content of glass bottles.
“We will bring Visy’s sustainability culture to O-I, aiming to increase recycled content of glass bottles from one-third to two-thirds,” Mr Pratt said in a statement.
Visy is already one of the world’s largest privately owned recycling and packaging companies.
Visy’s acquisition of Owens-Illinois comes after a frustrating two decades for the US group after it entered the Australian market in 1998 by acquiring the ACI Glass packaging business.
Mr Pratt said the addition of glass manufacturing to Visy’s portfolio is in line with the company’s long-term strategy of creating local manufacturing job opportunities and supporting local communities. After the acquisition settles, Visy would employ 7200 people in well-paying manufacturing jobs, he said.
The billionaire, who is working from a home office at his Raheen mansion in Melbourne’s Kew, has been championing the need for a resurgence in Australian manufacturing to help lift the country out of the pandemic-induced recession.