German glass and plastic pharmaceutical packaging manufacturer Gerresheimer is to sell its borosilicate glass tubing business to US glass manufacturer Corning for €196m.
The two companies will enter into a 10-year supply agreement for pharmaceutical glass tubing.
Gerresheimer and Corning also plan to set up a joint venture to speed innovation in the pharmaceutical glass packaging market, in which Gerresheimer will hold 25% and Corning 75%.
Gerresheimer said glass tubing is an intermediate product which it manufactures mainly for its own plants, where the tubes are used to manufacture ampoules, vials, cartridges and glass syringes. To a lesser extent the company sells tubing to external customers.
Corning, with its strong expertise in glass, materials sciences and material innovation, 'is well-positioned to manufacture and further develop highest-quality glass tubing for the pharmaceutical packaging industry', Gerresheimer said.
Uwe Röhrhoff, CEO of Gerresheimer, said: 'In line with our strategy we will focus on our core competency of developing and manufacturing primary packaging solutions and delivery devices serving our pharma customers needs.
'Corning is an expert in the field of material sciences and glass production and therefore our perfect partner when it comes to serving our needs for highest quality pharmaceutical glass tubes. This is fully reflected in a long-term supply contract between us. Furthermore joining forces with Corning in a venture for innovative pharmaceutical glass packaging products will expand our product portfolio of high-quality tubular pharmaceutical packaging products.'
Upon closing of the deal, which is expected before the end of 2015, Corning will take ownership of Gerresheimer's tubing plants in Vineland (New Jersey, US) and Pisa (Italy), which employ around 300 people.
Gerresheimer reported sales for glass tubing amounting to €83m in 2014, with the EBITDA margin at around 23%.
