Pursuant to the merger agreement, Graham shareholders will receive 0.402 shares of Silgan common stock and $4.75 in cash for each share of Graham common stock, representing a total enterprise value, including net debt, of approximately $4.1 billion.
Based on Silgan’s closing stock price on 12 April 2011, the transaction implies a value of $19.56 per Graham share, representing a premium over the closing price of Graham’s stock on 12 April 2011 of approximately 17%.
“This acquisition creates the premier food and speciality beverage packaging company, allowing Silgan to significantly broaden its ability to serve these important markets with multiple rigid packaging options,” said Tony Allott, Silgan’s president and chief executive officer.
“Graham Packaging is a differentiated plastic packaging franchise with deep customer relationships and a strong track record for innovation. In combination, we anticipate building enhanced relationships with global customers in our target end markets.
“Silgan and Graham share a common operational discipline focused on returns on capital and cash flow generation. This acquisition will provide significant cost synergies, while efficiently utilising the debt capacity of our balance sheet,” continued Mr Allott. “As a result, we believe this combination will drive significant shareholder value creation.” he concluded.
The combined company has annual sales of over $6.2 billion, and its over 17,000 employees will operate 180 manufacturing facilities in 19 countries.
Source: Silgan Holdings Inc
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