New Amcor – Amcor buys Bemis for USD 5.26 billion
AUSTRALIA / USA • Amcor is acquiring US competitor Bemis, in a merger which will create a new holding company, New Amcor, with Bemis shareholders owning 29%. The remaining 71% of the company will be owned by Amcor shareholders, with New Amcor being listed on both the New York Stock Exchange (NYSE) along with the ASX. The all-stock deal is valued at USD 5.26 billion.
Amcor’s board will incorporate three members of the Bemis board, adding up to 11 directors in total. Amcor Chairman Graeme Liebelt will remain in his position. CEO Ron Delia will continue as the sole executive director on the board. Closing of the transaction is conditional upon the satisfaction of customary conditions including regulatory and shareholder approvals. The transaction is targeted to close in the first quarter of calendar year 2019.
As Bloomberg reports, about 70% of Bemis’s revenue is in North America from customers that include some of the biggest names in consumer products, such as Unilever NV, Tyson Foods Inc. and Johnson & Johnson. The manufacturer makes lids, bags, pouches, wraps and labels for everything from pet and baby foods to bread, coffee and raw meat.
Bemis Chief Executive Officer Bill Austen is cutting annual costs by USD 65 million as the company struggles to increase packaging sales in the U.S. and Latin America, its biggest markets. The companies plan to reduce expenses by an additional USD 180 million from the combination. Established in 1858 and based in Neenah, Wisconsin, the manufacturer has 16,000 employees at 56 facilities in 12 countries.
Melbourne-based Amcor also is focused on plastic packaging, with about 54% of sales in flexible products and 29% in rigid products like bottles, according to a presentation on the deal. Amcor has the greatest sales share (more than one third) in North America, 31% in Europe and 5% in Australia and New Zealand.
The combined company will include 160 plants, a “global flexible packaging footprint” of USD 9 billion” – according to the presentation by Amcor and Bemis mentioned below: Amcor USD 5 billion and Bemis USD 4 billion. New Amcor has pledged to develop all of its packaging to be recyclable or reusable by 2025.