(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

By Karen Kwok

LONDON, Nov 20 (Reuters Breakingviews) - The Switzerland-based company is paying $8.4 bln for US rival Berry. It’s a low price when compared with the cost savings on offer, but the target brings with it debt and a business that is struggling to grow. Rapid consolidation among peers also raises the pressure to merge.

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CONTEXT NEWS

Switzerland-based Amcor on Nov. 19 agreed to buy U.S. peer Berry Global for $8.43 billion in an all-stock deal, creating a consumer and healthcare packaging giant with combined revenues of $24 billion.

Berry’s shareholders will receive 7.25 Amcor shares for each Berry share, valuing the group at $73.59, a premium of 9.75% to the stock’s close on Nov. 18. Amcor shareholders will hold about 63% of the combined company.

The transaction is expected to result in synergies of about $650 million by the end of the third year after the closing of the deal, which is expected to happen in the middle of 2025.

The combined entity will be named Amcor, with a primary listing in New York. The transaction has been unanimously approved by the boards of both companies.

Shares of Amcor ended 3% lower at $9.89 on Nov. 19, while Berry Global’s shares ended 1% lower at $66.16.

(Editing by Neil Unmack and Oliver Taslic)

((For previous columns by the author, Reuters customers can click on karen.kwok@thomsonreuters.com))