Australian packaging giant Amcor is buying US flexible packaging leader Bemis for $US6.8 billion ($A9.2 billion) before listing on the New York Stock Exchange (NYSE). A combined holding company, New Amcor, will be incorporated in Jersey.
“Combining these two complementary companies will create the global leader in consumer packaging, with the footprint, scale and capabilities to drive significant value for shareholders,” Amcor told the ASX in a statement.
Amcor and Bemis will be combined into a newly created holding company called New Amcor and be incorporated in Jersey - a self-governing dependency of the UK located in the Channel Islands that was identified by the EU last year as one of 17 global tax havens.
“It is intended that New Amcor will be tax resident in the UK after closing,” the company said. “New Amcor will have a primary listing on the NYSE and a listing on the ASX.”
Amcor will still trade on the ASX but only through Chess Depositary Interests - a type of security used by the ASX to allow international companies to trade on the local market. Australian shareholders will have the option of holding shares in the NYSE listing or via a secondary listing in the ASX through Chess Depositary Interests.
The deal, subject to approval by regulators and both sets of the shareholders, would see Amcor issue 5.1 of its shares for each Bemis share. Bemis shareholders will end up with 29 per cent of the combined company and Amcor shareholders will have 71 per cent.
"We will establish a listing on the NYSE with a market capitalization of about $US17 billion," said Amcor CEO Ron Delia. "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, which transferred its global headquarters from Melbourne to Zurich in 2015, is a global leader in packaging solutions, supplying 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 US$9.1 billion and EBITDA of US$1.4 billion.
Bemis Company is a supplier of flexible and rigid plastic packaging used by leading food, consumer products, healthcare, and other companies worldwide. It has 56 packaging plants in the US and 11 other countries. Founded in 1858, Bemis reported 2017 net sales of US$4.0 billion. Bemis has a strong technical base in polymer chemistry, film extrusion, coating and laminating, printing, and converting. Headquartered in Neenah, Wisconsin, Bemis employs approximately 16,000 people worldwide.
The combined businesses will have a total revenue of $US13 billion.
"The combination of Bemis and Amcor is transformational, bringing together two highly complementary organizations to create a global leader in consumer packaging,” said Bemis president and CEO, William F. Austen. “We believe this combination, which is an exciting growth story for both companies, will benefit all stakeholders.”
Amcor chairman Graeme Liebelt will remain as chairman of the ‘New Amcor,’ with the enlarged board to include eight current Amcor directors and three directors from Bemis.