Amcor, a Zurich, Switzerland-based provider of packaging for the pharmaceutical, food, beverage, and other markets, has agreed to acquire Berry Global, an Evansville, Indiana-based provider of packaging for various markets, including pharmaceuticals, in an $8.4-billion deal.

The proposed merger brings together two complementary businesses, combining Berry Global’s regional flexible packaging and global containers and closures businesses with Amcor’s global flexible packaging and regional container businesses. The deal also merges two complementary global healthcare businesses.  

The combined company would have revenues of $24 billion and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $4.3 billion, including run-rate synergies.

On the R&D front, the combined company would have an annual R&D investment of $180 million, approximately 1,500 R&D professionals, 10 innovation centers worldwide, and 7,000+ patents, registered designs, and trademarks. Part of the R&D focus would be to access new sustainability products (substrates, barrier, fiber and recycling), digital solutions, and other innovation in adjacent businesses and technologies.  

On a cost basis, the combined company would aim to achieve cost, growth, and financial synergies of $650 million by end of third year after close, $530 million annual run-rate pre-tax cost synergies, $60 million in annual run-rate financial savings, and $60 million annual run-rate pre-tax earnings benefit from growth synergies. An additional $280 million of one-time cash benefits from working capital efficiencies is expected to offset approximately $280 million of expected pre-tax costs to achieve synergies. 

Under the deal, Berry shareholders will receive a fixed exchange ratio of 7.25 Amcor shares for each Berry share held upon closing, resulting in Amcor and Berry shareholders owning approximately 63% and 37% of the combined company, respectively. The transaction has received unanimous approval of the Boards of Directors of both Amcor and Berry and values Berry’s common stock at $73.59 per share. 

Closing is targeted in the middle of 2025, subject to shareholder approvals, regulatory approvals, and satisfaction of other customary closing conditions. 

The combined company will retain the Amcor name and have its global head office in Zurich, Switzerland, Amcor’s current heqadquarters, and will retain a significant presence in Evansville, Indiana, the current headquarters of Berry Global.  

Upon closing Peter Konieczny, currrently CEO of Amcor, will serve as CEO of the combined company. Graeme Liebelt, currently Amcor’s Non-Executive Director and Chairman,will serve as Chairman of the combined company, and Stephen Sterrett, currently Chairman of Berry Global, will serve as Deputy Chairman of the combined company. Upon completion of the transaction, Amcor’s board of directors will expand to 11 directors, four of whom will be nominated by Berry. 

Source: Berry Global and Amcor