Ardagh Group has started started 'exclusive negotiations' with France based Compagnie de Saint-Gobain to acquire Verallia North America (VNA) in a transaction worth $1.7bn.

Muncie, Indiana headquartered Verallia North America is the leading glass container manufacturer in the US, and provides containers to the North American wine, food and beverage industries with annual revenues of about $1.2bn.

The company produces about 9 billion containers per year from its 13 facilities in the US.

Ardagh Group chairman Paul Coulson said the acquisition of Verallia North America would be an another important milestone in the evolution of Ardagh which would add scale, diversity and value to its global packaging operations.

"The transaction would increase the size of our glass business globally by almost 60% and be a very significant step in developing our operations in the US. It would result in approximately 40% of Ardagh Group's total sales and EBITDA being generated in the US," Coulson said.

Luxembourg based Ardagh Group is a global provider of glass and metal packaging solutions, providing packaging for global food, beverage and consumer care brands.

Ardagh Group CEO Niall Wall said VNA is a very innovative business that would allow the company to expand glass operations into the very important wine sector in the US for the first time.

"It represents an excellent opportunity to provide our US customers with enhanced competitiveness and improved levels of service through the achievement of greater operational efficiencies,"Wall said.