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Packaging Company Amcor Closes USD 6.8bn Acquisition of Bemis.

M2 EQUITYBITES-June 12, 2019-Packaging Company Amcor Closes USD 6.8bn Acquisition of Bemis


12 June 2019 - Australian packaging company Amcor Ltd. (ASX: AMC) and US-based Bemis Company, Inc. (NYSE: BMS) have closed the merger of the two companies, the companies said.

The transaction was effected at a fixed exchange ratio of 5.1 Amcor shares for each Bemis share, resulting in Amcor and Bemis shareholders owning approximately 71% and 29% of the combined company, respectively.

This is equivalent to a transaction price of USD 57.75 per Bemis share based on Amcor's closing share price of AUD 15.28 on August 3, 2018, and represents a premium of 25% to Bemis' closing price of USD 46.31 per share as of August 2, 2018.

The deal creates global flexible packaging footprint across key geographies.

Amcor said it will have a larger, more balanced and more profitable emerging markets business, with sales of some USD 3.5bn from around 30 emerging markets.

The company estimates pre-tax annual cost synergies of approximately USD 180m (representing approximately 4% to 5% of Bemis sales) by the end of the third year from procurement, manufacturing and G and A efficiencies, incremental to Bemis' "Agility" improvement plan.

This combination will be effected through a merger of Amcor and Bemis into a newly created holding Company incorporated in Jersey. It is intended that New Amcor will be tax resident in the UK after closing.

New Amcor will have a primary listing on the NYSE and a listing on the ASX. Amcor and Bemis shareholders will receive shares in New Amcor in a tax-free exchange.

Existing Amcor shareholders will have the option to receive one New Amcor ASX listed CDI or one New Amcor NYSE listed share for each Amcor share held.

Bemis shareholders will receive 5.1 New Amcor NYSE shares for each Bemis share held, resulting in Amcor and Bemis shareholders owning approximately 71% and 29% of the combined company, respectively.

With completion of the transaction, New Amcor's board is expected to comprise 11 members, eight of whom are current Amcor directors, and three of whom are current Bemis directors.

Amcor's current chairman, Graeme Liebelt and current CEO Ron Delia will continue in those roles after the transaction and Delia will continue to serve as the only Executive director on the board.

New Amcor will continue to maintain a critical presence in Wisconsin and other key Bemis locations.

Amcor is supplies a range of rigid and flexible packaging products into the food, beverage, healthcare, personal care and other fast moving consumer end markets. Amcor operates around 195 sites in over 40 countries, with approximately 35,000 employees.

For the year ended 30 June 2017, Amcor generated revenues of USD 9.1bn and EBITDA of USD 1.4bn.

Bemis Company is a supplier of flexible and rigid plastic packaging used by leading food, consumer products, healthcare, and other companies worldwide.

Founded in 1858, Bemis reported 2017 net sales of USD 4bn.

UBS AG, Australia Branch and Moelis and Company LLC are acting as joint financial advisors and Kirkland and Ellis and Herbert Smith Freehills as legal counsel to Amcor.

Goldman Sachs and Co LLC is acting as financial advisor and Faegre Baker Daniels LLP, Cleary Gottlieb Steen and Hamilton LLP and MinterEllison as legal counsel to Bemis.

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Publication:M2 EquityBites (EQB)
Date:Jun 12, 2019
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