Published : 2 weeks ago, on 19/11/2024

(Reuters) -Switzerland-based Amcor Plc on Tuesday agreed to buy U.S. peer Berry Global for $8.43 billion in stock, creating a company with a strong presence across the consumer and healthcare packaging markets.

Berry shareholders will receive $73.59 per share held, a premium of 9.75% to the stock’s last close. Berry’s shares were up about 4% in early trading.

A sharp slowdown in demand for packaging material following a boom fueled by e-commerce during the pandemic has sparked consolidation in the sector.

In April, U.S.-based International Paper agreed to an all-share deal for DS Smith that valued the British packaging firm at 5.8 billion pounds ($7.2 billion).

Amcor and Berry make cartons, closures and containers for food, beverage, pharmaceutical, medical, home and personal-care, industries and will have footprint across more than 140 countries.

The deal is one of Amcor’s largest acquisitions. In 2019, it bought U.S. rival Bemis in a $5.25 billion all-stock deal but had to divest three manufacturing facilities to gain approval from the U.S. Justice Department.

On a call with analysts, Amcor CEO Peter Konieczny said he did not foresee any exposure to regulatory approvals in the deal with Berry, pointing toward relatively lesser overlaps.

Konieczny will serve as CEO of the combined company, which is expected to generate revenue of $24 billion and adjusted earnings of $4.3 billion, including synergies.

The deal is expected to close in the middle of 2025. The combined entity will be named Amcor Plc, with a primary listing on the NYSE.

UBS and Goldman Sachs are financial advisers to Amcor, while Lazard and Wells Fargo advised Berry.

Separately, Berry posted a fourth-quarter adjusted profit of $2.27 per share, compared with analysts’ average estimate of $2.25, according to data compiled by LSEG.

(Reporting by Savyata Mishra, Ananya Mariam Rajesh and Utkarsh Shetti in Bengaluru; Editing by Mrigank Dhaniwala and Sriraj Kalluvila)