Two consumer packaging giants—Amcor Limited and Bemis Company—will merge after its directors unanimously approved a US$6.8 billion buyout from Amcor that was announced on Aug. 6.
This acquisition is Amcor’s biggest and is an effort by the Melbourne-based plastics packaging company to capitalize on growth opportunities in North America and Brazil, according to Bloomberg.
Both companies supply flexible and rigid plastic packaging that are used by leading food, consumer products, and health care markets.
The merge, which is expected to be concluded in the first quarter of 2019, will make the newly created company (New Amcor) the world’s largest packaging group. New Amcor will shift its primary listing to the New York Stock Exchange (NYSE) while it maintains a listing on the Australian Stock Exchange (ASX), with expected index inclusion in both markets. It is expected to be included in the S&P 500.
Amcor and Bemis shareholders will own 71 percent and 29 percent of the combined company, respectively, based on a fixed exchange ratio of 5.1 Amcor shares for each Bemis share. Bemis shareholders will receive the equivalent of US$57.75 a share in Amcor stock and is based on Amcor’s closing share price of AU$15.28 on Aug. 3, 2018.
The newly formed New Amcor will have combined revenues of US$13 billion.
Currently, Amcor operates around 195 sites in over 40 countries with approximately 35,000 employees. Amcor generated revenues of US$9. 1 billion and US$1.4 billion EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the year ended June 30, 2017.
US-based Bermis employs approximately 16,000 individuals worldwide and reported net sales of US$4.0 billion for the year 2017.
Amcor’s CEO, Ron Delia said in a statement, “The strategic rationale for this combination and the financial benefits are highly compelling for both Amcor and Bemis shareholders.”
“With this transaction, Amcor will have a stronger value proposition with the scale, breadth and resources to unlock value from these opportunities, for the benefit of our shareholders, customers and employees,” Delia added.
Bemis’s CEO and President William F. Austen, said: “We believe this combination, which is an exciting growth story for both companies, will benefit all stakeholders. Our employees will benefit as part of a larger and more global organization focused on a commitment to customer service, integrity and supporting strong teams.”
According to a statement, New Amcor will “offer customers and employees the most compelling value proposition in the packaging industry and deliver the most sustainable innovations for the environment.”
Delia said, “Both companies are grounded in strong values, a shared commitment to innovation and value-added consumer packaging, and have talented management teams.”
New Amcor also continues to support the communities in which Bemis operates and announced a contribution of US$35,000 to the Bemis Foundation on behalf of Amcor’s 35,000 employees worldwide.
New Amcor expects to leverage Bemis’s plant network and innovation center while continuing to invest in the United States.