Packaging company Amcor will absorb U.S. rival Bemis in a $5.25 billion all-stock deal, the Australian company announced Monday.
“We will establish a listing on the New York Stock Exchange with a market capitalization of about $17 billion,” Amcor CEO Ron Delia told CNBC about the deal.
The deal will give Amcor deeper access to the rigid-plastic packaging business in North America. That segment of Amcor’s business represented about 32 percent its sales before the deal, focused in Europe and Asia.
Amcor will issue 5.1 of its shares for each Bemis share, valuing the stock at $57.75 per share, and Bemis shareholders will end up with 29 percent of the combined company. The transaction is subject to approval by regulators and shareholders of both firms, which expect it to be completed in the first quarter of 2019. Packaging firms are jostling to buy growth with acquisitions and Delia emphasized Amcor’s ability to still keep its checkbook open.
“With this structure of the deal, the company will continue to have an investment free balance sheet,” Delia said. “It’s the right time in the cycle to be using stock.”
Delia did not say if any jobs would be cut as a result of the acquisition, instead calling the deal “overwhelmingly about adding capability and talent.”
Activist investor Starboard Value had four directors added to the Bemis board of directors in March. None of those Starboard-related directors will join the combined Amcor board after the deal, Delia said.
– Reuters contributed to this report.
