Amcor snaps up packaging rival Berry Global for $8.4bn

19th Nov 2024 12:54

(Sharecast News) - Australian packaging group Amcor announced on Tuesday that it is to buying smaller American rival Berry Global in a deal worth $8.4bn.

The transaction will see Berry shareholders receive 7.25 Amcor shares for each Berry share held, valuing Berry at $73.59 per share, compared with Monday's closing price of $67.05.

Upon completion, Berry shareholders will own 37% of the combined company.

Amcor, which is dual listed in Sydney and New York, said the acquisition of its Indiana-based competitor will bring together two highly complementary businesses with combined revenues of $24bn and adjusted EBITDA of $4.3bn.

The companies estimate that the tie-up will result in $650m of cost, growth and financial synergies by the end of their third year together, being 35% accretive to earnings per share.

"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," said Amcor's chief executive Peter Konieczny.

"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."

The deal has received unanimous approval from the boards of both companies, and is expected to complete in mid-2025, though the transaction is still subject to shareholder and regulatory approvals, along with other customary closing conditions.

Stock futures in Berry were up nearly 5% at $70.25 in pre-market trading in New York, while US-listed futures of Amcor gained 1% to $10.15.