Amcor plc and Berry Global Group, Inc. have announced their merger in an all-stock transaction. The deal will see Berry shareholders receive a fixed exchange ratio of 7.25 Amcor shares for each Berry share held upon closing, valuing Berry's common stock at $73.59 per share.
The combination brings together two highly complementary businesses and is expected to result in annual earnings synergies of $650 million. The transaction is aimed at creating a global leader in consumer packaging solutions, with a broader flexible film and converted film offering for customers, as well as scaled containers and closures businesses and a unique global healthcare portfolio.
Financially, the combined companies are expected to generate revenues of $24 billion and adjusted EBITDA of $4.3 billion, including run-rate synergies. Additionally, they are projected to achieve over 35% adjusted cash EPS accretion and a double-digit return on investment after three years. The transaction is expected to close in the middle of 2025, subject to shareholder and regulatory approvals.
The global head office of the combined company will remain in Zurich, Switzerland, while maintaining a significant presence in Evansville, Indiana. Peter Konieczny will serve as the chief executive officer, Graeme Liebelt as the chairman, and Stephen Sterrett as the deputy chairman of the combined company.
The merger is anticipated to create the innovation partner of choice, offering a wider range of sustainable solutions and greater choice for customers and consumers. It will also provide local expertise, global capabilities, and supply chain resilience, as well as unlocking further opportunities for portfolio refinement and value creation for shareholders.
In terms of financial benefits, the merger is expected to deliver a $650 million benefit from identified cost, growth, and financial synergies by the end of the third year. This includes $530 million in annual run-rate pre-tax cost synergies, $60 million in annual run-rate financial savings, and $60 million in annual run-rate pre-tax earnings benefit from growth synergies.
The market has reacted to these announcements by moving the company's shares -0.6% to a price of $10.09. For the full picture, make sure to review Amcor's 8-K report.
