Australia’s Amcor Limited has announced that it will acquire US-based Bemis in an all-stock deal, which will subsequently be a global packaging major with combined revenue of US$ 13 billion. Boards of Directors of both the companies have unanimously approved the deal. Post the deal Amcor and Bemis shareholders will own approximately 71% and 29% of the combined company, respectively.
Amcor’s 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; with the right structure for both sets of shareholders to participate in a unique value creation opportunity.”
The combined entity will have a comprehensive global footprint with more balanced, profitable exposure to emerging markets. It will have sales of US$ 3.5 billion from around 30 emerging markets. Amcor has a strong presence in India as well. In 2015, Amcor had acquired Packaging India, which had presence in flexible packaging food and personal care. Packaging India was established in 1990. Furthermore, it has blown film extrusion, printing, laminating, slitting and pouch-making facilities at plants in Puducherry, Sitarganj and Cuddalore.
More revenue and better customer service
Bemis’ president and CEO, William F Austen said, “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.”
Moreover, the greater scale of the new entity will help in better serving customers in every region. Increased economies of scale and resources through Amcor’s leading positions in Europe, Asia and Latin America will be combined with Bemis’ leading positions in North America and Brazil.
The new entity will be listed in both Australia and the US with primary listing on the NYSE and an ASX listing via CHESS Depository Interests (CDIs).
While there is a trend for global consolidation, India is a part of the equation. Currently, three of the larger global flexible packaging companies are in India – Huhtamaki, Constantia and Amcor-Bemis.