Australian firm Amcor Ltd yesterday announced a US$6.8 billion buyout of US-based rival Bemis Co to become the world’s largest plastic packaging group, saying that it would shift its primary listing to the New York Stock Exchange.
Amcor is to issue 5.1 of its shares for each Bemis share under the deal, a transaction that would see Bemis stockholders owning 29 percent of the combined company and Amcor the rest.
That represents a 25 percent premium to Bemis’ closing price of US$46.31 on Thursday last week.
LISTINGS
The new entity, which is to have combined revenue of US$13 billion, would have a main listing on the New York Stock Exchange and is expected to be included in the S&P 500.
It would also remain listed in Australia.
Amcor’s biggest-ever acquisition would give it a stronger foothold in the North American and Brazilian markets and made sense in an industry undergoing consolidation, Amcor CEO Ron Delia said.
“The strategic rationale for this combination and the financial benefits are highly compelling for both Amcor and Bemis shareholders,” Delia said in a statement, adding that there would be significant cost savings.
“Amcor identified flexible packaging in the Americas as a key growth priority and this transaction delivers a step change in that region,” he said.
There was an increasing number of opportunities to capitalize on shifting consumer needs and the demand for more responsible packaging solutions that protect the environment, he added.
‘TRANSFORMATIONAL’
Bemis CEO William Austen said he was thrilled by the opportunities the merger offered and noted the common features of both firms, including histories that date back more than 150 years.
“The combination of Bemis and Amcor is transformational, bringing together two highly complementary organizations to create a global leader in consumer packaging,” Austen said. “We believe this combination, which is an exciting growth story for both companies, will benefit all stakeholders.
Amcor produces rigid and flexible packaging for food, beverage, pharmaceutical, medical, home, personal care and other products, operating in 40 countries with more than US$9 billion in sales annually.
It has been on a growth drive over the past few years, with several smaller-scale acquisitions, including Alusa SA, the largest flexible packaging business in South America, and Chinese firm Hebei Qite Packing Co (河北奇特包裝).
Bemis, which was established in 1858 and is headquartered in Wisconsin, operates in a similar vein to Amcor, but on a smaller scale, generating US$4 billion in sales last year, most of it from the US.
Its clients include Kraft-Heinz Co, Proctor & Gamble Co and Kimberly-Clark Corp.
The deal is expected to be concluded in the first quarter of next year, with Bemis directors getting three seats on Amcor’s 11-person board.
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