Flexible and paper giant Amcor has swooped for US packaging giant $8.43bn, potentially creating a global mega-company with a big footprint in the consumer and healthcare packaging sectors.
Amcor and Berry will combine in an all-stock transaction – 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 deal will bring together two complementary businesses to create a global leader in consumer packaging solutions, with a broader flexible film and converted film offering for customers, a scaled containers and closures business and a unique global healthcare portfolio.
It will establish more capabilities and higher capacity to invest in solving technical challenges with combined annual R&D investment of $180m, 1,500 R&D professionals, 10 innovation centres worldwide and 7,000+ patents, registered designs, and trademarks.
Peter Konieczny, chief executive, Amcor, said: “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. I, and the Amcor team, look forward to joining with Berry to accelerate change and real impact for our customers and their consumers.”
Kevin Kwilinski, chief executive, Berry, added: “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.”
Peter Konieczny will serve as chief executive, Graeme Liebelt will serve as chairman and Stephen Sterrett will serve as deputy chairman of the combined company.
The companies said they expect:
$650m benefit from identified cost, growth and financial synergies by end of third year
$530m annual run-rate pre-tax cost synergies
$60m in annual run-rate financial savings
$60m annual run-rate pre-tax earnings benefit from growth synergies
