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Verallia: Europe's Glass Champion
How a centuries-old, seemingly boring bottle business became a €3+ billion sustainability darling and textbook private equity success story
I. Introduction: The Unlikely Champion
In the rolling hills of France's Charente region, workers at a glass factory near Cognac recently gathered to witness something unprecedented: the ignition of the world's first 100% electric furnace for food-grade glass packaging. On September 10, 2024, Verallia, the European leader and third-largest glass packaging producer in the world, inaugurated this technological innovation, which reduces CO2 emissions by 60% compared to a traditional furnace. For an industry whose core technology—melting sand at 1,500°C—has remained fundamentally unchanged since ancient Mesopotamia, this was nothing short of revolutionary.
But how did Verallia arrive at this moment? As the European leader and the world's third largest producer of glass packaging for beverages and food products, Verallia wants to redefine the way glass is manufactured, reused and recycled, to make it the most sustainable packaging material in the world. The company's journey from a corporate division of a 350-year-old conglomerate to a standalone sustainability champion offers lessons in private equity transformation, strategic patience, and the surprising relevance of ancient materials in the modern economy.
With 35 glass plants, 6 decor plants and 12 cullet processing centers in 12 countries, Verallia manufactures 16 billion glass bottles and jars each year to supply 10,000 companies, from local family producers to major international brands. The company serves the world's champagne houses, cognac makers, and premium spirits brands, alongside everyday food and beverage producers.
This story traverses five key inflection points: Saint-Gobain's strategic exit decisions, Apollo's private equity transformation, the successful 2019 IPO, strategic acquisitions that expanded Verallia's European footprint, and the decarbonization imperative that positions glass as the packaging material of the future. Along the way, we'll examine why glass packaging—a business model that sounds almost comically straightforward—generates remarkably stable cash flows and attracts long-term investors willing to pay premium multiples.
The hook is simple yet profound: in an era obsessed with disruption and technology, one of the most compelling investment narratives centers on a material invented in ancient Egypt. Glass is 100% recyclable, chemically inert, and infinitely reusable without quality loss. These properties, combined with rising anti-plastic regulations and consumer sustainability consciousness, have transformed what was once a "boring" industrial business into a sustainability darling. Welcome to Verallia's story.
II. Glass: The Oldest Packaging Material & Why It Still Matters
Picture a Roman wine merchant in 79 AD, carefully sealing his finest vintage into a glass amphora. Nearly two millennia later, the fundamental chemistry remains identical. Silica sand, soda ash, limestone—these same raw materials still form the backbone of every bottle that holds your morning orange juice or evening Bordeaux. Yet unlike virtually every other ancient technology, glass hasn't been displaced by modern alternatives. If anything, it's making a comeback.
The global glass packaging market is experiencing robust growth, driven by increasing demand for sustainable and eco-friendly packaging solutions across various industries. The market's resilience stems from the inherent properties of glass—its recyclability, inertness, and barrier properties—making it a preferred choice for food, beverage, and pharmaceutical products.
The science behind glass's endurance is elegant. Glass is 100% recyclable and can be recycled without loss in quality or purity. Recycled glass is referred to as cullet and is used in production of glass to make new glass, reducing the amount of other materials used and the amount of energy required. Unlike plastics, which degrade with each recycling cycle, glass maintains its molecular structure indefinitely. A wine bottle recycled today could theoretically contain molecules from containers made centuries ago.
The Market Landscape
The global glass packaging market size was estimated at USD 78,483.4 million in 2024 and is projected to reach USD 102,311.2 million by 2030, growing at a CAGR of 4.5% from 2025 to 2030. This growth trajectory, while modest compared to technology sector hyperbole, represents exactly the kind of stable, predictable expansion that long-term investors prize.
The beverage segment continues to dominate the global glass packaging market, holding approximately 57% market share in 2024, making it the largest end-user segment. Wine, spirits, beer, and premium beverages remain the core demand drivers, but pharmaceutical and cosmetics applications are growing rapidly.
The Sustainability Paradox
Glass presents a fascinating paradox. Its production requires intense heat—furnaces operating at temperatures that would melt steel—consuming significant energy and generating substantial CO2 emissions. Yet its perfect recyclability and permanent material properties make it arguably the most sustainable packaging option available.
Cullet plays a major role in the decarbonation process. Replacing raw materials with recycled glass offers numerous advantages. Adding 10 points of cullet to the production process reduces a glass furnace's CO2 emissions by 5% and its energy consumption by 2.5%. Recycling one tonne of cullet saves an average of 1.2 tonnes of virgin raw materials.
The regulatory environment increasingly favors glass. While glass packaging is favored for sustainability, alternatives like plastic and metal remain strong competitors. Recycled plastic (rPET) bottles, supported by regulations such as EU Directive 2019/904, mandate the inclusion of 20% rPET in beverage bottles by 2025. However, anti-plastic legislation globally is creating tailwinds for glass that industry participants haven't seen in decades.
Why Premium Brands Choose Glass
Beyond sustainability metrics, glass serves functions that no alternative can match. Wine makers understand that glass's impermeability protects delicate flavor compounds from oxidation. Spirits producers know that glass's weight and clarity communicate luxury in ways that plastic never could. Health and safety considerations are also driving growth of the glass packaging market. Consumers are increasingly aware of the potential health risks associated with plastic packaging, such as chemical leaching and contamination. Glass packaging, being chemically inert, does not interact with the contents, ensuring the purity and safety of food and beverages.
For investors, this translates into customer relationships characterized by high switching costs, long-term contracts, and brand-driven loyalty. When Dom PĂ©rignon selects a bottle design, that relationship typically spans decades, not quarters.
III. Saint-Gobain Origins & The Long Road to Verallia
The story of Verallia is inseparable from Saint-Gobain, one of Europe's most storied industrial companies. In 2015, Saint-Gobain celebrated its 350th anniversary—350 reasons to believe in the future. Founded in 1665 under King Louis XIV to produce mirrors for the Palace of Versailles, Saint-Gobain evolved into a diversified industrial giant spanning construction materials, high-performance materials, and—until 2015—glass packaging.
As early as 1918, the Saint-Gobain Group, already well established in glass production for buildings, acquired various French glassworks. Taking advantage of the industrialization of hollow glass production—notably thanks to the research of French engineer Claude Boucher—in the 1920s-1930s, Saint-Gobain became one of the main players in hollow glass in France.
Building an Empire
The packaging division grew through decades of acquisitions and organic expansion. Already present in France and Spain, the hollow glass activities acquired several glass companies in Europe and around the world from the late 1980s, with the main acquisitions being Oberland Glas in Germany and Ball Foster in the United States.
The American connection proved particularly significant. Verallia North America can trace its roots in the United States back to 1842 when Joseph Foster started a glass factory in Stoddard, New Hampshire. This factory later grew into the Foster-Forbes Glass Company. This heritage gave the combined entity global scale, with operations spanning from New Hampshire to SĂŁo Paulo, from DĂĽsseldorf to Cognac.
In 2010, Saint-Gobain Packaging launched the Verallia brand name worldwide. The rebranding signaled a new chapter—consolidating disparate regional operations under a unified identity with a distinctive name (a portmanteau suggesting "vera" for truth/authenticity and "lia" as a suffix evoking glass properties).
Strategic Pivot at Saint-Gobain
But by 2007, Saint-Gobain's leadership had concluded that glass packaging no longer fit the group's strategic vision. This was not the first setback Saint-Gobain met in its attempt to sell or spin off the unit. The company revealed a strategy to focus on the habitat and construction market as early as 2007. But in 2008, CEO Pierre-André de Chalendar postponed an attempt to sell the unit because of the onset of the financial crisis.
The logic was straightforward: Saint-Gobain wanted to concentrate on higher-growth markets in construction and high-performance materials. Glass packaging, while stable and profitable, required capital-intensive furnace investments and offered limited exposure to emerging markets where construction was booming.
Saint-Gobain chairman and CEO Pierre-André de Chalendar stated: "The two transactions meet the objectives we announced in November 2013 to raise the growth potential and reduce the capital intensity of our businesses, increase our presence in emerging countries and in the US, and expand our range of differentiated products supported by strong brands."
This strategic clarity would prove prescient, but the path to divestiture would prove far more challenging than anticipated. The next decade would see a failed IPO, piecemeal asset sales, and ultimately a private equity transaction that transformed Verallia's trajectory.
IV. The First Failed IPO & Strategic Pivot (2011)
In spring 2011, European markets appeared to be recovering from the financial crisis. Saint-Gobain's advisors saw an opportunity: take Verallia public, crystallize value, and refocus the conglomerate on its core construction businesses. The timing seemed propitious.
Earlier, sources said that Saint-Gobain—which had aimed to sell-off the unit to focus on its home and construction products—had received enough orders for 90% of the shares it was offering. Saint-Gobain had set an indicative price range of EUR 29.50-36.00 per share for the Paris listing of a 40% stake in Verallia.
The French building material group was seeking to raise around €958 million from the issue. The proposed offering was delayed due to the Greek debt crisis that was alarming investors.
Then disaster struck—from multiple directions simultaneously.
The Perfect Storm
The Greek crisis was one of two major factors contributing to the postponement, creating anxiety and uncertainty in investors. The profit warning posted by Verallia's competitor Owens-Illinois also stirred up concerns. The bottling giant projected a 3-6% profit drop for 2011 second quarter net earnings compared to the year before. However, O-I's warning applied to markets that didn't necessarily affect Verallia.
Saint-Gobain decided to postpone the initial public offering of Verallia, in light of the very adverse market conditions. The pricing was expected to occur on June 21, 2011, two weeks after the opening of the Offer, which started on June 7th.
The profit warning sent shares in the world's largest glass bottle maker down 6%. In addition, investors grew increasingly risk-averse after delays on a final agreement on a Greek bailout, sending European stock indexes lower and volatility indexes higher. One banker, speaking not for attribution said the Verallia failure was likely to have a chilling effect on any other companies contemplating an IPO in the short-term.
Lessons in Market Timing
The failed 2011 IPO offers critical lessons in market timing and peer sentiment. Saint-Gobain had set an indicative price range of EUR 29.50-36.00 per share for the Paris listing. The failure to get enough investor interest is notable since Verallia had been priced to sell—at 9-17% discount to Owens-Illinois in terms of 2011 EV/EBITDA.
Even with a discounted valuation, market sentiment overwhelmed fundamentals. Institutional investors, spooked by headlines about Greek sovereign debt and a peer's earnings miss, couldn't distinguish between macro concerns and company-specific value. The book was 90% covered—tantalizingly close to success—but market volatility made completing the transaction impossible.
The Piecemeal Approach
With a full IPO blocked, Saint-Gobain pivoted to selling assets individually. In April 2014, Ardagh Group purchased Verallia North America from Saint-Gobain.
Cie. de Saint-Gobain SA agreed to sell the U.S. business of its Verallia glass bottle-and-jar unit to Ardagh Group SA for $1.7 billion in a deal that tops the valuation placed on it in an earlier spinoff attempt. "It puts a high value on our North American containers business, above the multiples contemplated at the time of the planned IPO," said Saint-Gobain Chief Executive Officer Pierre-André de Chalendar.
The transaction valued Verallia North America, the second-largest glass container maker in the U.S., at 6.5 times 2012 earnings before interest, taxes, depreciation and amortization, according to Saint-Gobain. The 2011 IPO would have valued Verallia between 5.8 times and 6.4 times Ebitda.
The irony was rich: by waiting three years and selling to a strategic buyer, Saint-Gobain achieved better pricing than the failed public market exit would have delivered. But this left the European and Latin American operations still inside the conglomerate, awaiting their own separation.
V. The Apollo Acquisition: Private Equity Transformation (2015)
By 2015, Saint-Gobain's patience was exhausted. The remaining Verallia operations—primarily European and Latin American assets—represented a successful business that simply didn't fit the parent company's strategy. Enter Apollo Global Management, one of the world's largest private equity firms.
Following a comprehensive process, Saint-Gobain granted funds managed by affiliates of Apollo Global Management exclusivity after having received a purchase offer for Verallia of €2,945 million (enterprise value). This firm and binding offer was not subject to any financing conditions. Apollo was also in talks with Banque Publique d'Investissement (BPI) in connection with BPI's potential acquisition of a minority stake in Verallia. Saint-Gobain chose Apollo for the quality of its offer and its support for the industrial project and for Verallia's employees.
Why Apollo?
Apollo is a leading global alternative investment manager. Apollo had assets under management of approximately $163 billion as of March 31, 2015 in private equity, credit and real estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources, including the packaging and materials sectors. Apollo has a strong track record in France based on investments in major industrial companies such as Constellium.
Robert Seminara, Senior Partner at Apollo, and Jean-Luc Allavena, Operating Executive at Apollo, said: "We are extremely excited to be acquiring Verallia, which is an outstanding franchise and one of the world's leading packaging companies. We look forward to partnering with management and its tremendous employee base to support the continued growth and innovation of Verallia."
The Numbers
Verallia was one of the leading manufacturers of glass bottles and jars in the world, generating €2,391 million in net sales and €230 million in operating income in 2014 (excluding Verallia North America, which exited the Group in April 2014).
In accordance with the announcement of June 8, 2015, Saint-Gobain sold Verallia to funds managed by affiliates of Apollo Global Management LLC and BPI France, which currently hold 90% and 10%, respectively, of the share capital. The sale was completed based on an enterprise value of €2,945 million and reduced Saint-Gobain's net debt by an estimated €2.5 billion.
The Commission concluded that the proposed acquisition would not raise competition concerns, in particular because there were no overlaps between the activities of Apollo Management and its portfolio companies and those of Verallia. The transaction was examined under the simplified merger review procedure.
The Private Equity Playbook
Apollo's investment thesis aligned perfectly with classic private equity value creation: take a stable, cash-generating business with room for operational improvement, install disciplined management, optimize the capital structure, and position for exit. Glass packaging offered particular advantages:
- Stable Cash Flows: Bottles are essential goods—consumption doesn't disappear during recessions
- Customer Stickiness: Multi-year contracts, custom mold investments, and quality certification create switching costs
- Consolidation Opportunities: A fragmented competitive landscape offered roll-up potential
- Infrastructure Value: The physical assets—furnaces, plants, land—provided downside protection
Originally part of the Saint-Gobain Group, the company became a standalone entity in 2015, positioning itself strategically to focus on the needs of its clients in the food and beverage sectors.
For the first time in nearly a century, the glass packaging operations could chart their own course—free from the strategic constraints of a diversified parent company with competing priorities.
VI. The Transformation Years Under Private Equity (2015-2019)
With Apollo's backing and standalone status, Verallia embarked on an intensive operational transformation. The company's leadership, working closely with Apollo's operating partners, implemented what would become known as the Performance Action Plan (PAP)—a continuous improvement philosophy that would define Verallia's culture.
As Michel Giannuzzi, then President-CEO of Verallia, declared during the IPO launch: "This operation comes amid a process of continuous improvement of our industrial and commercial performance, which we have accelerated over the past two years and which is beginning to bear fruit."
Michel Giannuzzi: The Transformation CEO
Chairman and CEO of Verallia since 2017, Michel Giannuzzi was appointed Chairman of the Board of Directors in 2022. Thanks to the development and implementation of a fruitful value creation strategy, he successfully led Verallia's initial public offering on the Euronext Paris regulated market in October 2019. Before joining Verallia, he served as Chairman of the Management Board of Tarkett, world leader in innovative solutions for floor coverings and sports surfaces, from 2007 to 2017. During his mandate, he implemented a profitable and sustainable growth strategy, leading to Tarkett's initial public offering on the Euronext Paris regulated market in 2013. Prior to that, Michel Giannuzzi held a series of executive positions within the Michelin Group and the Valeo Group. He is a graduate of the École Polytechnique and Harvard Business School.
Giannuzzi brought exactly the experience Apollo needed: someone who had taken an industrial business public successfully and understood how to manage the transition from private equity ownership to public market accountability.
The Operating Transformation
Verallia's commitment to innovation led to the development of lightweight packaging solutions, contributing to significant reductions in energy consumption during production. The company's technological advancements yielded a 15% reduction in glass weight without compromising quality.
In terms of market positioning, Verallia holds a substantial share of the glass packaging market in Europe, with approximately 25% market share in the wine and spirits segment.
By 2018, the transformation was yielding measurable results. In 2018, the company—which employed nearly 10,000 people—generated €544 million in adjusted EBITDA on sales of €2.4 billion. EBITDA margins expanded steadily as operational improvements took hold.
The company reported robust growth in revenue, up 6.7% to €633 million in Q1 2019 (up 9.9% at constant exchange rates), with strong growth in adjusted EBITDA up 18.8% to €142 million. The adjusted EBITDA margin increased to 22.5%, up 230 basis points compared to Q1 2018.
Building the Sustainability Narrative
Perhaps Apollo's most prescient decision was positioning Verallia as a sustainability champion before ESG investing became mainstream. The timing proved perfect: by the 2019 IPO, institutional investors were increasingly seeking companies with credible environmental credentials.
Glass's inherent recyclability—a property that had always existed—suddenly became a key selling point. The company began emphasizing its role in the circular economy, positioning itself not as a traditional industrial business but as a solution to the plastic waste crisis.
Verallia differentiated itself from its competitors by its "Glo-Cal" operational model, which is based on the strength of its international network—illustrated by an industrial presence in 11 countries, with 32 glass production sites, 3 decoration plants, 5 technical centres as well as 8 cullet processing centres—combined with the proximity relationships maintained with its customers by nearly 10,000 employees.
The stage was set for what would become one of the most successful European IPOs of 2019.
VII. The Successful IPO (2019)
On October 4, 2019, the Paris stock exchange floor buzzed with anticipation as Michel Giannuzzi and his team prepared to ring the bell. Eight years after the failed 2011 attempt, Verallia would finally achieve public company status—and the contrast with the earlier failure couldn't have been more stark.
Verallia (ticker code: VRLA) was listed on October 4, 2019 through the admission to trading of the 118,393,942 shares making up its capital, including 32,900,819 shares allotted as part of a Global Offering. Euronext welcomed Verallia, one of the world's leading producers of glass packaging for beverages and food, to compartment A of its regulated market in Paris. Verallia is the leading European producer of glass packaging for beverages and food, the second largest producer in Latin America and the third largest producer globally. In 2018, Verallia produced nearly 16 billion glass bottles and jars.
The offering price was set at €27 per share. Market capitalisation on the day of listing was €3.196 billion, and the operation gross proceeds amounted to €888 million. This major operation was the 4th most important that year in the Euro zone. The Paris market place had not seen a deal of this scale since ALD in 2017.
It was the largest IPO on Euronext Paris since 2017.
What Changed Between 2011 and 2019?
The successful 2019 IPO succeeded where 2011 failed for several interconnected reasons:
- Transformed Operations: Four years of private equity discipline had dramatically improved margins and cash generation
- Market Timing: No sovereign debt crisis, no peer profit warnings
- ESG Tailwinds: Sustainability concerns had transformed glass's positioning from commodity to solution
- Credible Management: Giannuzzi's track record at Tarkett provided investor confidence
At the listing ceremony, Michel Giannuzzi stated: "We are very pleased with the successful completion of Verallia's initial public offering, which illustrates the strong confidence of investors in our strategy and in the relevance of our positioning on the glass packaging market."
The Post-IPO Ownership Structure
Upon completion of the IPO, Horizon Parent Holdings, which was 90% owned by AIF VII Euro Leverage, L.P., an investment fund managed by an affiliate of Apollo Global Management, and 10% owned by Bpifrance Participations, held approximately 64% of the share capital. The free float amounted to 18% of the share capital. As part of the IPO, Bpifrance Participations acquired a 1.3% direct stake in the share capital and Brazilian investor BWSA an 8.6% stake.
Apollo's exit would be gradual, allowing the market to absorb selling pressure while Verallia built its track record as a public company. The presence of Bpifrance, the French sovereign investment fund, signaled government endorsement of the company's strategic importance.
Apollo's Return
Apollo bought the majority of Verallia in a 2015 deal valuing the business at €2.95 billion. Four years later, the IPO valued the company at €3.2 billion, with Apollo still holding a substantial majority stake. Including dividends, debt paydowns, and subsequent share sales, Apollo's return on Verallia ranks among its successful European investments.
VIII. Strategic Acquisitions & Consolidation (2022-2024)
With public market currency and a strong balance sheet, Verallia pivoted from defense to offense, pursuing strategic acquisitions that would expand its European footprint and strengthen its position in premium segments.
Allied Glass: Entering the UK Premium Market
In November 2022, Verallia completed the acquisition of 100% of the capital of Allied Glass. The Group had announced on November 2nd the signature of a binding agreement with an affiliate of Sun European Partners LLP for the acquisition of Allied Glass. The acquisition of Allied Glass, a strategic step in Verallia's external growth, enabled the Group to penetrate the UK market. Headquartered in Leeds, Allied Glass was a leading player in the premium glass packaging market in the United Kingdom, where it generated over 95% of its revenues, with 4 furnaces located in West Yorkshire and around 600 employees.
Allied Glass was acquired by Verallia for a total enterprise value of ÂŁ315 million.
With more than 150 years of glass-making expertise each, both groups shared the same strong values—especially care for customers and teamwork—that guide and inspire their behavior. This acquisition enabled Verallia to benefit from Allied's expertise in premium glass bottles, specifically in the Scotch Whisky and Gin sectors.
In the framework of the acquisition of Allied Glass in November 2022, Verallia decided to take a further step in the integration by renaming the company as Verallia, as of January 1, 2023.
Vidrala Italy: Strengthening the Italian Position
Verallia confirmed that the acquisition of Vidrala's glass business in Italy, for an enterprise value of €230 million, was finalized on July 4, 2024. The acquisition was financed with a 3-year Term Loan set up with a pool of international banks. Equipped with two recently renovated furnaces, the Corsico-based plant benefits from modern production facilities with a capacity of 225Kt/year and enjoys a strong positioning, particularly in the beer, food and spirits markets.
Vidrala's Italian subsidiary operates from one production site in Corsico near Milan, with two furnaces. In 2023, the company generated revenue of €131 million and EBITDA of €33 million.
Following this acquisition, the Verallia Group now operates 7 production sites in Italy.
Vertical Integration: Securing the Cullet Supply
Beyond horizontal expansion, Verallia pursued vertical integration into the recycling supply chain. The main objective of this investment was to continue Verallia's strategy of increasing the percentage of cullet use in the production process and to progress towards the CO2 reduction target to achieve the first major goal of a 46% reduction in emissions by 2030 compared to 2019.
Verallia has established 19 cullet processing centres across eight countries. These facilities sort, clean and prepare used glass to be made into packaging. Many Verallia plants recycle all of their internal cullet and are dedicated to reusing cullet collected from consumers wherever possible. These efforts have allowed Verallia to increase the amount of recycled glass it uses. In 2023 alone, Verallia used an additional 227,000 tonnes of cullet compared to 2019, equating to more than 54,000 tonnes of COâ‚‚ emissions avoided.
This vertical integration serves multiple strategic purposes: it secures a critical raw material supply, reduces production costs, and strengthens the sustainability narrative that resonates with both customers and investors.
IX. The Decarbonization Imperative: Electric & Hybrid Furnaces
The glass industry faces an existential challenge: how do you decarbonize a manufacturing process that has relied on burning fossil fuels for millennia? Verallia's answer represents one of the most ambitious industrial transformation programs in European manufacturing.
On September 10, 2024, Verallia, the European leader and third-largest glass packaging producer in the world, inaugurated the first 100% electric furnace at its Cognac plant. This technological innovation, which reduces CO2 emissions by 60% compared to a traditional furnace, is part of the Group's ambitious decarbonization strategy and marks a decisive step towards a more sustainable future for the glass industry. Through a clear and robust CSR roadmap, the Group aims to reduce its emissions (scopes 1 and 2) by 46% by 2030 compared to 2019. As part of this strategy, the Group announced in 2021 the construction of its first 100% electric glass furnace with an investment of €57 million.
The Technology Breakthrough
The result of a strategic partnership with Fives, an international industrial engineering group of French origin, this furnace represents a breakthrough in the production of flint and extra-flint glass. With a daily capacity of 180 tons, equivalent to 300,000 bottles, it reduces CO2 emissions by 60% compared to a traditional furnace. This innovation is aligned with the Group's objective of drastically reducing its carbon emissions.
This 100% electric oven also helps reduce energy losses from 25% to 5%, according to the group's managers.
"This is a strategic project for both Verallia and Fives as leaders in low carbon glass making technology. Our technology will be a game changer for the industry as it enables the highest glass quality with the lowest energy input and minimum carbon emissions," said Guillaume Mehlman, President of Steel & Glass at Fives.
Beyond Cognac: The Broader Roadmap
As part of the deployment of its decarbonization strategy, the Group started up its first 100% electric furnace in Cognac (France) in March, with a confirmed 60% reduction in CO2 emissions compared to a traditional furnace. In 2025, Verallia will continue to implement its CSR roadmap with the start-up of its first hybrid furnace in Zaragoza (Spain).
Scope 1 and 2 CO2 emissions amounted to 2,357 kt CO2 for the year 2024, a decrease of -9.4% compared to 2023 emissions of 2,603 kt CO2 (i.e. -23.7% vs. 2019). Verallia is therefore in line with its trajectory of reducing its Scope 1 and 2 CO2 emissions by 46% in absolute terms by 2030. Scope 1 and 2 emissions intensity has also decreased this year from 0.47 tCO2/TPG in 2023 at 0.44 tCO2/TPG in 2024. In addition, the cullet utilization rate reached 56.7% in 2024, up 2.6 points compared to 2023.
The Technology Risk Question
The decarbonization investment carries material execution risk. Electric furnaces require access to reliable, affordable renewable electricity—availability varies significantly across Verallia's geographic footprint. The plant's second furnace, which was shut down at the end of December due to the drop in global cognac shipments, will be converted to gas-only production before a potential conversion to electric by 2028. "The technology will be chosen according to the function of the furnace, the electric furnace cannot produce green or dead leaf glass, used by other vineyards," explained Romain Barral, operations director at the Cognac factory.
Not all glass can be produced electrically—colored glass presents particular challenges. The investment timeline is long, and technology is evolving rapidly. But for investors, Verallia's first-mover position in electric glass production could prove a significant competitive advantage if carbon pricing intensifies across Europe.
X. Financial Performance Deep Dive
Verallia's financial trajectory tells the story of private equity transformation, successful public market positioning, and cyclical adjustment. Understanding these numbers requires appreciating both the company's structural strengths and its sensitivity to broader economic conditions.
The 2023 Peak
Verallia achieved +16.5% increase in revenue to €3,904 million in 2023 (+21.4% at constant scope and exchange rates) compared with 2022. Growth in adjusted EBITDA reached €1,108 million in 2023, 28.0% higher than in 2022 (€866 million). Improvement in adjusted EBITDA margin to 28.4% in 2023 compared with 25.8% in 2022 (+256 bps), reaching the margin target set out in the 2022-24 plan a year in advance. Sharply higher net profit at €475 million compared with €356 million in 2022 (+33.7%) and earnings per share of €4.02 (+37.7% versus 2022).
These results represented the culmination of years of operational improvement, pricing discipline, and favorable market conditions. The nearly 28.5% EBITDA margin demonstrated the business model's inherent profitability when operating at full capacity.
The 2024 Normalization
Continued solid profitability in 2024 despite volumes under pressure (-1.3% vs. 2023): 2024 revenue of €3,456 million, down -11.5% compared to 2023 on a reported basis and at constant scope and exchange rates, with adjusted EBITDA of €842.5 million and adjusted EBITDA margin of 24.4%. Confirmed recovery in activity in Q4: organic volume growth and adjusted EBITDA up +4.3% to €201.2 million with a 24.5% margin. Robust balance sheet: net debt ratio on 31 December 2024 at 2.1x last 12-month adjusted EBITDA.
"Following an exceptional year in 2023, Verallia successfully adapted to the uncertainties of 2024, marked by ongoing destocking effects that weighed on demand recovery. The Group continues to demonstrate robust profitability, underpinned by solid fundamentals. We have maintained stringent cost and investment management while advancing our strategic initiatives, including the inauguration of the first 100% electric furnace in Cognac and the completion of a new acquisition in Italy."
Regional Dynamics
Verallia's geographic diversification provides both stability and complexity. Growth in revenue at constant scope and exchange rates excluding Argentina was -14.0% in 2024 compared with 2023. Argentina's hyperinflation creates accounting noise that obscures underlying performance, requiring investors to focus on ex-Argentina metrics.
The European core—France, Italy, Germany, Spain, and now the UK—generates the majority of profits and benefits from proximity to premium beverage producers. Latin American operations (Brazil, Argentina, Chile) offer exposure to emerging market growth but carry currency and macroeconomic volatility.
Balance Sheet Strength
The two rating agencies S&P and Moody's confirmed the Group's Investment Grade positioning, with credit ratings of BBB-, outlook Stable in May 2024 and Baa3, outlook Stable in March 2024 respectively.
Investment-grade ratings provide Verallia access to cost-effective financing for both acquisitions and capital expenditures. The Board proposed payment of a dividend of €1.70 per share for the 2024 financial year.
XI. Porter's Five Forces Analysis
Understanding Verallia's competitive position requires systematic analysis of the forces shaping industry profitability. The glass packaging sector exhibits characteristics that favor established players while presenting meaningful challenges from substitutes and powerful customers.
1. Threat of New Entrants: LOW
The dominance of a few large players underscores the economies of scale involved, while smaller companies are carving out niches through specialized products and services.
Entry barriers in glass packaging are formidable. A single glass furnace requires capital investment exceeding €100 million and specialized engineering expertise accumulated over decades. Furnace rebuilds occur on 10-15 year cycles, creating long-term customer relationships that new entrants cannot easily disrupt. Environmental permitting adds regulatory hurdles that extend project timelines and costs.
The technical expertise required—controlling molten glass at 1,500°C with consistent quality—takes years to develop. Companies like Verallia have accumulated this knowledge over 200+ years of operations, creating an experience curve advantage that would be prohibitively expensive to replicate.
2. Bargaining Power of Suppliers: MODERATE
Raw materials for glass production—silica sand, soda ash, limestone—are relatively commoditized and available from multiple sources. However, energy costs represent a critical variable. Natural gas price volatility directly impacts production economics, creating margin pressure during energy crises.
External cullet is the main raw material used by glassmakers. Its incorporation rate in bottle and jar production has risen considerably in recent years, reaching up to 95% in some of the Group's furnaces. At present, however, its availability limits its integration.
Verallia's vertical integration into cullet processing addresses this vulnerability, securing supply while reducing exposure to spot market pricing.
3. Bargaining Power of Buyers: MODERATE-HIGH
The customer base includes some of the world's largest beverage companies—entities with significant negotiating leverage. The Cognac electric furnace was designed in collaboration with several Verallia clients—Rémy Cointreau, Hennessy and Martell&Co (Pernod Ricard)—who are also committed to a decarbonization strategy.
However, switching costs provide counterbalancing power. Custom mold investments, quality certification processes, and logistics optimization create relationship stickiness. Premium segment customers—where Verallia has deliberately focused—prioritize quality and sustainability over pure price negotiation.
4. Threat of Substitutes: MODERATE
While glass packaging is favored for sustainability, alternatives like plastic and metal remain strong competitors. Recycled plastic (rPET) bottles, supported by regulations such as EU Directive 2019/904, mandate the inclusion of 20% rPET in beverage bottles by 2025. This push for recyclable plastics is a significant challenge for this industry as companies shift to lighter, cost-effective alternatives.
The substitution threat varies dramatically by end market. For premium wine and spirits, glass remains irreplaceable—no serious champagne house would package in plastic. For lower-value beverages, cans and PET compete aggressively on cost and weight. Anti-plastic regulations create offsetting tailwinds, particularly in Europe where environmental policy is most stringent.
5. Competitive Rivalry: HIGH
Competition is fierce amongst major players like Owens-Illinois, Verallia, and Ardagh Glass Group, with strategic mergers and acquisitions further shaping the market landscape.
The largest markets are currently Europe and North America, with significant future growth expected in Asia, particularly China and India. Owens-Illinois, Verallia, and Ardagh Glass Group are currently the dominant players, although market share is expected to shift with future mergers and acquisitions.
Regional oligopolies characterize most markets—a few producers serve each geography, creating pricing discipline but intense competition for major contracts. Capacity additions by any player affect industry utilization rates and pricing power for all participants.
XII. Bull Case, Bear Case & Key Risks
The Bull Case
Sustainability Tailwinds Strengthen: Glass's inherent properties—infinite recyclability, chemical inertness, consumer perception of purity—align perfectly with secular trends toward sustainable packaging. As plastic restrictions intensify globally, glass gains share in categories currently dominated by alternatives.
Decarbonization Leadership Pays Off: Verallia's first-mover investment in electric furnaces creates competitive advantage as carbon pricing escalates. Customers increasingly require sustainable supply chains; Verallia can offer verifiably lower-carbon packaging at scale.
Premiumization Continues: Consumer preference for premium beverages—craft spirits, fine wine, artisanal foods—drives demand for glass's aesthetic and functional qualities. Verallia's focus on premium segments captures disproportionate margin growth.
Consolidation Opportunities: The fragmented competitive landscape offers continued acquisition potential. BWGI has been Verallia's reference shareholder since its IPO in 2019, currently holding approximately 29% of its share capital. BWGI does not intend to delist the company following the completion of the offer. With BWGI as majority owner following the 2025 tender offer, strategic flexibility remains for value-creating M&A.
The Bear Case
Energy Cost Volatility: Glass manufacturing is energy-intensive. European natural gas price spikes—like those following Russia's invasion of Ukraine—directly compress margins. While hedging provides near-term protection, sustained high energy costs fundamentally alter the cost structure.
Plastic Innovation Threat: Advanced recyclable plastics could erode glass's sustainability advantage. If rPET or bio-plastics achieve true circularity at lower weight and cost, substitution pressure intensifies significantly.
Wine Market Structural Decline: Wine consumption in developed markets—Verallia's core—faces demographic headwinds as younger consumers shift preferences toward other beverages. While spirits and beer provide diversification, wine represents a substantial portion of premium glass demand.
Decarbonization Execution Risk: Electric furnace technology remains nascent. Cost curves, reliability, and scalability across Verallia's 35-plant network are uncertain. Investments may not deliver expected returns if technology evolves in unexpected directions.
Hamilton Helmer's 7 Powers Analysis
- Scale Economies: Moderate—furnace economics favor larger players, but advantages level off at Verallia's scale
- Network Effects: Minimal—glass packaging lacks network characteristics
- Counter-Positioning: Limited—competitors can replicate sustainability investments
- Switching Costs: Moderate—custom molds and quality certification create friction, but not insurmountable barriers
- Branding: Low—while Verallia has brand recognition, glass bottles are typically unbranded at consumer level
- Cornered Resource: Low—no unique access to raw materials or technology
- Process Power: Moderate—200+ years of accumulated expertise, Performance Action Plan culture, Glo-Cal operating model
The power analysis suggests Verallia's competitive position relies more on operational excellence and industry structure than sustainable moats. Investors should expect returns driven by execution rather than protected economic rents.
XIII. The 2025 BWGI Tender Offer & Current Situation
The most recent chapter in Verallia's ownership evolution began in early 2025 when BWGI—the Brazilian investment vehicle of the Moreira Salles family that had been a shareholder since the 2019 IPO—announced its intention to acquire majority control.
BW GestĂŁo de Investimentos Ltda ("BWGI") filed a draft offer document with the AMF relating to its voluntary tender offer for the shares it does not own in Verallia S.A., with no intent to implement a squeeze out. Confirmed on March 10, 2025, the proposed Offer aimed at making BWGI the majority shareholder of Verallia, thereby strengthening the links existing since the IPO in 2019.
Brasil Warrant Administração de Bens e Empresas S.A. ("BWSA") has been operating for over seven decades as the Moreira Salles family's Brazilian holding company, successfully forging partnerships around the world with leading companies in a variety of sectors. BWSA is the controlling shareholder of BWGI, an independent asset management company established in 2008 with discretionary powers to manage the portfolio of investments of BWSA's controlling shareholders. BWGI, through its affiliates, has been a shareholder of Verallia since its initial public offering in 2019. Affiliates of BWGI also hold a stake in the French listed company Elis S.A., being its largest shareholder.
The Tender Offer Terms
BWGI, acting through Kaon V (a sub-fund of Kaon Investment Fund ICAV and direct shareholder of Verallia), irrevocably proposed to all shareholders of Verallia S.A. to acquire, in cash, the shares it does not own, at a price of €28.30 per share (following deduction of the ordinary dividend for the 2024 financial year of €1.70 per Verallia share). The Offer price implied: a +23.2% premium to the 1-month Volume Weighted Average Price as of January 30, 2025, a +24.2% premium to the 2-month VWAP.
Following the initial period of the public tender offer, BWGI held 84,937,142 Verallia shares, representing 70.31% of its share capital and 62.81% of its voting rights. The initial period of the Offer closed successfully on July 25, 2025. 50,097,577 Verallia's shares were tendered to the Offer during its initial period, representing 41.47% of Verallia's share capital. BWGI, which therefore became the controlling shareholder of Verallia, intends to support Verallia in creating long-term value by executing its strategic plan, which places innovation and the energy transition at the heart of its project.
The reopening period of the voluntary public tender offer closed on August 13, 2025. 8,141,380 Verallia's shares were tendered during its reopening period, allowing BWGI to hold 77.05% of Verallia's share capital and 69.15% of its voting rights.
Strategic Implications
Verallia's shares will remain listed on Euronext Paris. The Offer was not subject to any success threshold (other than the legal threshold under which BWGI shall own, following closing of the initial Offer, more than 50% of the share capital or voting rights of Verallia).
BWGI's commitment to maintain the public listing preserves liquidity for minority shareholders while providing patient capital for long-term strategic initiatives. The Moreira Salles family's investment horizon—measured in decades rather than private equity fund cycles—suggests continuity rather than disruption of current strategy.
XIV. Leadership & Governance
Understanding Verallia requires appreciating the leadership team that has guided its transformation and the governance structure that provides accountability.
Patrice Lucas: The Current CEO
Patrice Lucas, the Group's CEO, stated: "I would like to thank the shareholders and the Board of Directors for the confidence they have placed in me by appointing me Chief Executive Officer of Verallia, one of the world leaders in its industry. I am convinced that the Group, composed of engaged teams, serving operational, financial and environmental performance, has all the assets to pursue the strategy initiated by Michel Giannuzzi." Patrice Lucas, 55, has spent more than 30 years of his working life in the automotive sector. A graduate of the Compiègne University of Technology (UTC) and ENSAM Paris, he began his career in 1991 at Valeo where he worked for 15 years in various positions in France and abroad. He joined PSA Peugeot Citroën in 2006.
In 2014, Lucas became Executive Vice President and member of the Global Executive Committee in charge of PSA Corporate Planning, Programs and Strategy before taking over the management of the Latin America region in 2018. In 2021, he was appointed Deputy Chief Engineering Officer of the Stellantis Group.
Lucas's automotive background—an industry equally focused on operational excellence, cost management, and sustainability transformation—translates directly to glass packaging. His experience managing complex industrial operations across multiple geographies mirrors Verallia's Glo-Cal model.
Michel Giannuzzi: Continuity in Leadership
Michel Giannuzzi continues to serve as Chairman of the Board of Directors. At the end of the AGM in May 2022, Michel Giannuzzi ceased to hold the position of Chief Executive Officer of the Company, in the interest of applying best governance practices. Patrice Lucas, who joined the Group on February 1, 2022 as Chief Operating Officer, was appointed Chief Executive Officer.
The separation of Chairman and CEO roles reflects corporate governance best practices while preserving institutional memory. Giannuzzi's continued involvement as Chairman ensures strategic continuity during BWGI's transition to majority ownership.
XV. Key KPIs & Investment Considerations
For investors monitoring Verallia's ongoing performance, three metrics deserve particular attention:
KPI 1: Adjusted EBITDA Margin
This metric captures operational efficiency independent of capital structure and accounting choices. Verallia achieved 28.4% EBITDA margin in 2023 (peak) versus 24.4% in 2024 (trough). The normalized range of 25-28% represents healthy industrial profitability. Margin compression below 24% would signal pricing pressure or cost inflation beyond management's control; sustained expansion above 28% would indicate pricing power or structural improvement.
KPI 2: External Cullet Rate
The cullet utilization rate reached 56.7% in 2024, up 2.6 points compared to 2023. This metric directly impacts both sustainability credentials and production costs. Higher cullet rates reduce raw material costs and CO2 emissions simultaneously. Management targets 59% by 2025. Progress toward this goal indicates success in vertical integration and supply chain security.
KPI 3: Net Debt / Adjusted EBITDA (Leverage Ratio)
At 2.1x at year-end 2024, Verallia maintains balance sheet flexibility for both M&A and capital investment. Investment-grade rating agencies typically expect ratios below 2.5x for current ratings. Leverage above 2.5x would constrain strategic optionality; leverage below 1.5x might suggest suboptimal capital allocation.
XVI. Regulatory & Accounting Considerations
Argentina Hyperinflation: Verallia applies IAS 29 hyperinflationary accounting to Argentine operations, creating complexity in reported results. Investors should focus on ex-Argentina metrics to understand underlying performance trends.
Furnace Depreciation: Glass furnaces represent substantial long-lived assets depreciated over 10-15 year useful lives. Major furnace rebuilds create capital expenditure lumpiness that can obscure normalized free cash flow. The company distinguishes between "recurring capex" (approximately 8% of revenue) and "strategic capex" for furnace renovations and new technology.
Acquisition Accounting: Recent acquisitions (Allied Glass, Vidrala Italy) generate purchase price allocation effects including customer relationship amortization. Adjusted metrics exclude these non-cash charges to reflect underlying operating performance.
Carbon Regulation: EU Emissions Trading System (ETS) costs represent a growing line item as free allowances phase out. The decarbonization investment program aims partly to reduce ETS exposure, but full electrification remains distant.
XVII. Conclusion: The Eternal Material in a Sustainable Future
Verallia's story challenges assumptions about what constitutes an exciting investment. No breakthrough technology, no network effects, no software margin profile—just the steady transformation of an ancient material into a modern sustainability solution.
From Saint-Gobain division to Apollo portfolio company to independent public company to BWGI-controlled enterprise, Verallia has navigated multiple ownership transitions while steadily improving operations. The Performance Action Plan culture, sustainability positioning, and premium market focus create a differentiated competitive position in a consolidated industry.
Verallia's CSR strategy has been awarded the Ecovadis Platinum Medal, placing the Group in the top 1% of companies assessed by Ecovadis. The CO2 emissions reduction target of -46% on scopes 1 and 2 between 2019 and 2030 has been validated by SBTi (Science Based Targets Initiative). This is in line with the trajectory of limiting global warming to 1.5° C set by the Paris Agreement.
The risks are real: energy volatility, substitution pressure from evolving plastics, wine consumption headwinds, and decarbonization execution challenges. But for investors seeking exposure to the circular economy through a cash-generative, dividend-paying business with patient majority ownership, Verallia merits serious consideration.
Glass is 5,000 years old. Verallia is betting it will be equally relevant 5,000 years from now. In a world searching for sustainable solutions to material consumption, the most ancient packaging material might prove the most future-proof.
Material Disclosures: Analysis based on publicly available information as of November 29, 2025. BWGI completed its tender offer, holding approximately 77% of Verallia's share capital. The company remains listed on Euronext Paris (VRLA.PA).
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