BREAKINGVIEWS-Amcor’s cheap packaging deal hides a fragile item

Reuters

20 Nov 2024

(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.

Full view will be published shortly.

Follow @karenkkwok on X

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))

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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The opinions expressed are her own.)</p><p>   By Karen Kwok</p><p>      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.</p><p>   Full view will be published shortly.</p><p>   Follow @karenkkwok on X</p><p>   CONTEXT NEWS</p><p>   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.</p><p>   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. 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Rapid consolidation among peers also raises the pressure to merge.   Full view will be published shortly.   Follow @karenkkwok on X   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.   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