Combining the two complementary companies will create the global leader in consumer packaging, with the footprint, scale and capabilities to drive significant value for shareholders, offer customers and employees the most compelling value proposition in the packaging industry and deliver the most sustainable innovations for the environment.
The transaction will be effected at a fixed exchange ratio of 5.1 Amcor shares for each Bemis share, resulting in Amcor and Bemis shareholders owning approximately 71 percent and 29 percent of the combined company, respectively. This is equivalent to a transaction price of US$57.75 per Bemis share based on Amcor’s closing share price of AU$15.28 on August 3, 2018. It represents a premium of 25 percent to Bemis’ closing price of US$46.31 per share as of August 2, 2018.
Combined revenues are stated at US$13 billion, with EBITDA of US$2.2 billion, annual cash flow after capital expenditure of more than US$1 billion and an investment grade balance sheet
Amcor CEO Ron Delia said: ‘The strategic rationale for this combination and the financial benefits are highly compelling for both Amcor and Bemis shareholders. We are convinced this is the right deal at the right time for both companies, and with the right structure for both sets of shareholders to participate in a unique value creation opportunity. 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 capitalize on shifting consumer needs, an evolving customer landscape and the need to provide responsible packaging solutions that protect the environment. With this transaction, Amcor will have a stronger value proposition with the scale, breadth and resources to unlock value from these opportunities, for the benefit of our shareholders, customers and employees.
‘Amcor’s financial profile will be enhanced, and our existing capital allocation framework, or shareholder value creation model, will be maintained and strengthened with this transaction. The combined company expects to have an investment grade balance sheet that provides immediate capacity for further disciplined investment as well as a compelling, progressive dividend. Amcor will draw on our extensive merger integration experience to deliver the substantial benefits of this combination.’
William F. Austen, Bemis president and CEO, continued: ‘The combination of Bemis and Amcor is transformational, bringing together two highly complementary organizations to create a global leader in consumer packaging. We believe this combination, which is an exciting growth story for both companies, will benefit all stakeholders. Our employees will benefit as part of a larger and more global organization focused on a commitment to customer service, integrity and supporting strong teams. In addition, the combination will enable us to offer global, regional and local customers the most compelling value proposition in the industry through a broader product portfolio, increased product differentiation and enhanced operating capabilities, while leveraging Bemis’ extensive US manufacturing base and strengths in material science and innovation. Our shareholders will receive a significant premium in this transaction, reflecting the value we’ve built as an organization, as well as the opportunity to continue to participate in the upside potential of a more diversified combined company with greater scale and resources. We look forward to working together with Amcor to ensure a seamless integration.’
Delia concluded: ‘Amcor and Bemis have many things in common starting with proud histories that date back more than 150 years. Both companies are grounded in strong values, a shared commitment to innovation and value-added consumer packaging, and have talented management teams. We have always had a great deal of respect for Bemis and we are thrilled that its team in Wisconsin and around the world will be joining Amcor. Many people at Amcor today have joined us through acquisitions, including many of our leadership team, and we would expect Bemis to be well represented in Amcor at all levels of the organization.’
After completion of the transaction, Amcor will have a stronger and more differentiated value proposition for global, regional and local customers through:
- A comprehensive global footprint with more balanced, profitable exposure to emerging markets, including a global flexible packaging footprint across key geographies, and a larger, more balanced and more profitable emerging markets business, with sales of some US$3.5 billion from around 30 emerging markets;
- Greater scale to better serve customers in every region, through increased economies of scale and resources through Amcor’s leading positions in Europe, Asia and Latin America, and Bemis’ leading positions in North America and Brazil;
- Increased exposure to attractive end markets and product segments, with an enhanced growth profile from greater global participation in protein and healthcare packaging, leveraging innovative technologies in barrier films and foils;
- Best-in-class operating and innovation capabilities, by offering greater differentiation to innovate and meet customer demands for new and sustainable products through the deployment of proven, industry-leading commercial, operational and R&D capabilities;
- A continued strong commitment to environmental sustainability, with enhanced capabilities behind Amcor’s pledge to develop all recyclable or reusable packaging products by 2025; and
- Greater depth of management talent, with a stronger combined team by bringing the significant strengths and quality of the workforce across both companies.
Amcor is to establish a primary listing on the NYSE with an estimated market capitalization of US$17 billion, while maintaining a listing on ASX, with expected index inclusion in both markets. The combination will be effected through a newly created holding company, New Amcor.
New Amcor will continue to maintain a critical presence in Wisconsin and other key Bemis locations. The combined company also expects to leverage Bemis’ plant network and innovation center while continuing to invest in the US. New Amcor is further making a US$35,000 contribution to the Bemis Foundation.