Amcor is set to acquire Berry Global Group for US$8.43 billion, the latest in a series of industry mergers and acquisitions. The deal will create a new company capable of providing a far wider range of flexible and converted films, scaled containers and closures business and a unique global healthcare portfolio.
The merger is expected to close mid 2025.
Berry shareholders will receive a fixed exchange ratio of 7.25 Amcor shares for each Berry share held upon closing, resulting in Amcor and Berry shareholders owning approximately 63% and 37% of the combined company, respectively. The transaction has received unanimous approval from the boards of directors of both companies and values Berry’s common stock at US$73.59 per share.
Amcor CEO Peter Konieczny says, “This combination delivers on our strategy to accelerate growth by putting the customer first, elevating the role of sustainability and orienting the portfolio toward faster-growing, higher-margin categories.”
“We will have a more complete and more sustainable product offering, supported by stronger innovation capabilities, global scale and supply chain flexibility. We will help global and local customers grow faster and operate more efficiently with a team of exceptional talent. As a result, this combination also drives a step change in annual free cash flow, earnings growth and value creation for our shareholders.”
Berry CEO Kevin Kwilinski remarks: “Over the past year, Berry has undergone a significant transformation, completing the spin-off of our HHNF business, enhancing our product mix and optimizing our portfolio. Our combination with Amcor is a logical next step in our company’s evolution, and it is a testament to our entire team that we’re well-positioned to build on this momentum and deliver even more value to our shareholders.”
“We expect to better serve customers through a comprehensive and innovative consumer packaging portfolio and a complementary geographic coverage. Importantly Berry and Amcor have aligned philosophies focused on safety, employee experience, sustainability, innovation, customer intimacy, and functional excellence. We will be better together, and I look forward to all we will achieve as a combined organization.”
The combined group will have R&D investment of US$180 million per annum, 1,500 R&D professionals,10 innovation centers worldwide and 7,000 patents, registered designs and trademarks.
M&A activity to continue
Packaging industry analyst Neil Farmer tells Packaging Insights: “Plastics packaging operations in Europe are under pressure and not many are making money. There could be some rich pickings from the non-core operations of the deal, for those who can see a route towards establishing more diverse and profitable operations.”
“This is clearly a massive spread of operations and inevitably there will be disposals of non-core and less profitable businesses. Consolidation of R&D set-ups will occur.”
“For me, the jewel in the crown for Berry was the RPC Group businesses, which it bought in 2019, dramatically increasing the company’s global footprint.”
“I do not see this being sold initially, although the RPC empire has been reduced in recent years by closure of operations and the plastics sector is facing issues about profitability and competition from paper and fiber based materials.”
“Of course the trickle-down effect of the deal will create more M&A opportunities in the next 6-12 months. There are some larger groups with plastics operations in Europe and these could come into play in the near future.”
By Louis Gore Langton
Source: packaginginsights.com
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