Pactiv Evergreen and Novolex to Merge

By Bobby Samwell • Monday, December 09 10:19 • Permanent Link

Novolex and Pactiv Evergreen Inc. have announced their definitive agreement to combine, creating a leading manufacturer in food, beverage, and specialty packaging products. The transaction, valued at $6.7 billion, will see Pactiv Evergreen shareholders receive $18.00 per share in cash.

The strategic combination aims to deliver greater choice with over 250 brands and 39,000 combined SKUs, establishing one of the most diverse substrate sets in the packaging industry. This will include multiple types of fiber, resin, and post-consumer recycled content.

Furthermore, the transaction will accelerate product innovation by combining the companies' experience in materials science, R&D, and customizable product development capabilities. The goal is to better fulfill evolving customer demands for convenient, durable, protective, and user-friendly packaging.

In terms of financial metrics, the transaction consideration represents a 49% premium to the two-month unaffected volume weighted average trading price as of December 2, 2024, the last trading day prior to media reports regarding a potential transaction.

The transaction is expected to close in mid-2025 and is supported by funds managed by affiliates of Apollo and Canada Pension Plan Investment Board, with the latter contributing approximately US$1 billion and becoming a significant minority shareholder in the post-merger company.

Barclays Bank PLC is acting as the lead financial advisor to Novolex, with Paul, Weiss, Rifkind, Wharton & Garrison LLP serving as its legal advisor. On the other hand, Goldman Sachs & Co. LLC and Lazard Frères & Co. LLC are acting as financial advisors to Pactiv Evergreen, with Paul Hastings LLP serving as its legal advisor.

Novolex currently operates 56 manufacturing facilities in North America and Europe, while Pactiv Evergreen is a leading manufacturer and distributor of fresh foodservice and food merchandizing products and fresh beverage cartons in North America.

As a result of these announcements, the company's shares have moved 19.2% on the market, and are now trading at a price of $17.5. If you want to know more, read the company's complete 8-K report here.

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