The pension benefits cover nearly 12,800 workers and retirees of the glass container manufacturer in Muncie, Indiana, which has facilities in 11 states across the country. The agency is stepping in because the company is being sold to a below investment grade company, potentially jeopardizing the future of the pension plan.
On Jan. 17, Compagnie de Saint-Gobain agreed to sell Saint-Gobain Containers for $1.7 billion to a unit of Ardagh Group S.A., a Luxembourg-based glass and metal packaging company. The transaction would move the pension plan from Compagnie de Saint-Gobain, which is an investment grade company, to Ardagh, which is not.
According to PBGC estimates, the plan is 63% funded with $876 million in assets to pay $1.4 billion in benefits. The agency expects to cover $497 million of the $524 million shortfall.
Until PBGC becomes trustee, the plan remains under the control of Saint-Gobain Containers.