Amcor Limited to acquire Bemis Co. in an all-stock deal worth U.S$6.8 billion
Australia’s Amcor Ltd agreed to acquire Bemis company in an all-stock deal worth US$6.8 billion including the assumption of debts. This is equivalent to a transaction price of US$57.75 per Bemis share based on Amcor’s closing share price of A$15.28 on August 3, 2018, and represents a premium of 25% to Bemis’ closing price of US$46.31 per share as of August 2, 2018. It also boosts Amcor’s sales expansion of its plastics packaging business into the Americas.
The purchase is an effort by the Melbourne-based company to capitalise on growth opportunities for flexible packaging in North America and Brazil. It is the company’s biggest acquisition ever, adding U.S$4.1 billion to company revenue.
Amcor’s CEO, Ron Delia, said:
Amcor identified flexible packaging in the Americas as a key growth priority and this transaction delivers a step change in that region. There are an increasing number of opportunities arising for a leading packaging company to capitalise on shifting consumer needs, an evolving customer landscape and the need to provide responsible packaging solutions that protect the environment.
Almost half of Amcor’s sales is in flexible products and 29% in rigid products like bottles. More than one-third of Amcor’s sales are in North America, with 31% in Europe and 5% in Australia and New Zealand.
About 70% of Bemis’ 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 and Johnson.
Bemis CEO Bill Austen also announced cutting of annual costs by US$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 US$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.
