Packaging company Amcor has announced a deal to acquire Bemis, a US-based manufacturer of flexible and rigid plastic packaging, for $6.8 billion.
The two companies said a merger would create a plastic packaging giant with a “comprehensive global footprint” and “more balanced, profitable exposure to emerging markets”. Indeed, the combined company would have sales of $3.5 billion from around 30 different emerging markets.
The deal would deliver the “scale and capabilities to drive significant value for shareholders” as well as offering customers and employees “the most compelling value proposition in the packaging industry”, Amcor and Bemis said in a statement.
They claimed the combination would lead to annual revenues of $13 billion, and cost synergies of approximately $180 million a year.
Amcor CEO Ron Delia said: “The strategic rationale for this combination and the financial benefits are highly compelling for both Amcor and Bemis shareholders. We are convinced this is the right deal at the right time for both companies, and with the right structure for both sets of shareholders to participate in a unique value creation opportunity. Amcor identified flexible packaging in the Americas as a key growth priority and this transaction delivers a step change in that region.
“There are an increasing number of opportunities arising for a leading packaging company to capitalize on shifting consumer needs, an evolving customer landscape and the need to provide responsible packaging solutions that protect the environment. 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.
“Amcor’s financial profile will be enhanced, and our existing capital allocation framework, or shareholder value creation model, will be maintained and strengthened with this transaction. The combined company expects to have an investment grade balance sheet that provides immediate capacity for further disciplined investment as well as a compelling, progressive dividend. Amcor will draw on our extensive merger integration experience to deliver the substantial benefits of this combination.
Benefits: Amcor and Bemis hope to achieve…
Delia continued: “Amcor and Bemis have many things in common starting with proud histories that date back more than 150 years. Both companies are grounded in strong values, a shared commitment to innovation and value-added consumer packaging, and have talented management teams.”
“We have always had a great deal of respect for Bemis and we are thrilled that its team in Wisconsin and around the world will be joining Amcor. Many people at Amcor today have joined us through acquisitions, including many of our leadership team, and we would expect Bemis to be well represented in Amcor at all levels of the organisation.”
Bemis president and CEO William F Austen added: “The combination of Bemis and Amcor is transformational, bringing together two highly complementary organisations to create a global leader in consumer packaging. 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.
“In addition, the combination will enable us to offer global, regional and local customers the most compelling value proposition in the industry through a broader product portfolio, increased product differentiation and enhanced operating capabilities, while leveraging Bemis’ extensive US manufacturing base and strengths in material science and innovation. Our shareholders will receive a significant premium in this transaction, reflecting the value we’ve built as an organisation, as well as the opportunity to continue to participate in the upside potential of a more diversified combined company with greater scale and resources. We look forward to working together with Amcor to ensure a seamless integration.”
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