Packaging giants Amcor and Berry to combine as merger landscape shows signs of heating up
Berry Global Group Inc.’s stock was up 2% Tuesday after the packaging company agreed to be acquired by Amcor PLC for about $8.4 billion in stock, in a sign that an expected surge in big mergers is underway.
Amcor, AMCR4.61%, is essentially confirming recent forecasts by Wall Street bankers that major tie-ups to achieve scale will become more common. Zurich-based Amcor plans to bulk up its U.S. presence by buying Berry Global, the Evansville, Ind.-based specialist in consumer packaging as well as containers for the health and hygiene market.
The deal comes just a week after Citigroup Inc. Chief Executive Jane Fraser predicted a “big unlock” in deals as interest rates and the cost of borrowing fall and with the uncertainty of the presidential election in the rearview mirror.
In the case of Amcor and Berry BERY4.29%, , the companies are selling the deal as a win for consumers in combining their research and development capabilities to speed up sustainable packaging and grow their product offerings.
“The combined company will have unprecedented innovation capabilities and scale, and be uniquely positioned to accelerate growth, solve customers’ and consumers’ sustainability needs, unlock portfolio transformation and deliver significant value to both sets of shareholders,” the companies said.
Berry’s board agreed to a price of $73.59 a share in stock. With about 114.6 million shares of Berry’s stock outstanding, the deal values the company at about $8.4 billion.
Berry shareholders will receive a fixed exchange ratio of 7.25 Amcor shares for each Berry share.
Amcor’s stock fell 2.3% in midday trading.
For its part, Amcor often finds itself in the merger arena, but with smaller deals of late. Last month, the company said it would sell its 50% ownership in Bericap North America for $122 million.
In 2023, Amcor said it agreed to pay an undisclosed sum for Phoenix Fables in a move to grow its presence in India. And in 2022, Amcor paid an undisclosed sum for Moda Systems, a New Zealand-based manufacturer of protein-packaging machines.
SOURCE MARKET WATCH
