Carlyle Group taps UBS for Owens-Illinois chase

Owens-Illinois is the dominant player in the beer bottle manufacturing market in Australia Pictured: LTR

Investment bank UBS is understood to have been mandated to work with The Carlyle Group in its efforts to gain control of one of Australia’s most valuable glass bottle and container manufacturing operations — Owens-Illinois.

Competitors vying for the Australian operations of Owens-Illinois will no doubt have their advisers working solidly to get their second-round bids in by Thursday for the $1bn-odd manufacturing operation.

Carlyle is considered to be one of the favourites to win the Goldman Sachs-run competition given its industry experience.

However, Pacific Equity Partners and BGH Capital also have top-level staff who are seasoned performers in the space.

While PEP is close to UBS, it also has a strong relationship with Citi in Australia, so the American-based Citi could emerge on the ticket for the Australian buyout fund.

BGH Capital counts former Macquarie Capital head Robin Bishop among its founders, so it is expected he would call on the services of his former employer.

Blackstone, which is also a contender, has in recent times been close to JPMorgan.

Known to be through to round two are PEP, Bain Capital, Carlyle, Blackstone and BGH Capital, among others.

Also interested have been trade players Ardagh out of Europe and Visy Industries, the private packaging interests of billionaire Anthony Pratt. They are also thought to be through to round two. Sources say the sales process will be prolonged given the complexity of the sale.

Also on offer is the property of the Owens-Illinois manufacturing sites.

Another challenge for the seller is that there are many parties said to be around the hoop but few are said to be prepared to show their hand.

After second-round bids are received on December 19, a select group will then put forward final bids in the new year.

In Australia, Orora controls 70 per cent of the wine bottle manufacturing market, but only 10 per cent of the beer bottle market. Owens-Illinois has most of the remaining beer bottle manufacturing market in Australia, making it the dominant player.