Ann: Form 8-K - Amcor & Berry Announcement, page-3

AMCOR AND BERRY TO COMBINE IN AN ALL-STOCK TRANSACTION, CREATING A GLOBAL LEADER IN CONSUMER AND HEALTHCARE PACKAGING SOLUTIONS



Published
Nov 19, 2024 4:25am EST


Combination of Complementary Businesses Expands Product Offering and Capabilities to Support Higher Growth for Customers
Combined R&D and Innovation Investment Accelerates Development of Sustainable Packaging Solutions and Delivers Greater Choice for Customers and Consumers
$650 Million Annual Earnings Synergies Benefit
Over 35% Adjusted Cash EPS Accretion
Companies to Host Investor Conference Call Today at 8:00am U.S. Eastern Time
ZURICH and EVANSVILLE, Ind., Nov. 19, 2024 /PRNewswire/ -- Amcor plc ("Amcor") (NYSE: AMCR; ASX: AMC) and Berry Global Group, Inc. ("Berry") (NYSE: BERY), today announced they have entered into a definitive merger agreement, pursuant to which Amcor and Berry will combine in an all-stock transaction.
Berry shareholders will receive a fixed exchange ratio of 7.25 Amcor shares for each Berry share held upon closing, resulting in Amcor and Berry shareholders owning approximately 63% and 37% of the combined company, respectively. The transaction has received unanimous approval of the boards of directors of both Amcor and Berry and values Berry's common stock at $73.59 per share.
The combination brings together two highly complementary businesses to create a global leader in consumer packaging solutions, with a broader flexible film and converted film offering for customers, a scaled containers and closures business and a unique global healthcare portfolio. The combined company will have unprecedented innovation capabilities and scale, and be uniquely positioned to accelerate growth, solve customers' and consumers' sustainability needs, unlock portfolio transformation and deliver significant value to both sets of shareholders.
Amcor CEO, Peter Konieczny, said, "This combination delivers on our strategy to accelerate growth by putting the customer first, elevating the role of sustainability and orienting the portfolio toward faster growing, higher margin categories. We will have a more complete and more sustainable product offering, supported by stronger innovation capabilities, global scale and supply chain flexibility. We will help global and local customers grow faster and operate more efficiently with a team of exceptional talent. As a result, this combination also drives a step change in annual free cash flow, earnings growth and value creation for our shareholders. I, and the Amcor team, look forward to joining with Berry to accelerate change and real impact for our customers and their consumers."
Berry CEO, Kevin Kwilinski, added, "Over the past year, Berry has undergone a significant transformation, completing the spin-off of our HHNF business, enhancing our product mix and optimizing our portfolio. Our combination with Amcor is a logical next step in our company's evolution, and it is a testament to our entire team that we're well positioned to build on this momentum and deliver even more value to our shareholders. We expect to better serve customers through a comprehensive and innovative consumer packaging portfolio and a complementary geographic coverage. Importantly Berry and Amcor have aligned philosophies focused on safety, employee experience, sustainability, innovation, customer intimacy, and functional excellence. We will be better together, and I look forward to all we will achieve as a combined organization."
Compelling Strategic Benefits:

• Stronger business, strategically focused on high-growth, high-margin categories with greater capabilities and a more complete product offering for customers
  • Creates a global product offering in flexibles, containers and closures by combining Amcor's global flexibles and regional containers businesses with Berry's regional flexibles and global containers and closures businesses
  • Combines two highly attractive and complementary global healthcare businesses
  • Strengthens positions in high-growth, high-value categories, including Healthcare, Protein, Pet Food, Liquids, Beauty & Personal Care, and Food Service
  • Brings together complementary innovation capabilities and platforms, material science expertise and specialized tooling, design and multi-component assembly capabilities
• Creates the innovation partner of choice developing the most sustainable packaging solutions
  • Offers customers a wider range of more sustainable solutions which drive circularity, increase use of alternative materials and lower carbon footprint
  • Delivers greater choice for customers and consumers with a portfolio of unique flexible, container and closure solutions developed using a broader range of recycled materials, next generation lightweighting technologies, reuse and recycle ready capabilities and differentiated high barrier paper based formats
  • Establishes technology driven innovation leader with more capabilities and significantly higher capacity to invest in solving technical challenges with combined R&D investment of $180 million per annum, ~1,500 R&D professionals, 10 innovation centers worldwide and 7,000+ patents, registered designs, and trademarks
  • Enhances capabilities by leveraging corporate venturing partnerships to access new and groundbreaking sustainability solutions (substrates, barrier, fiber and recycling), digital solutions and disruptive ideas in adjacent businesses and technologies
• Scale and reach provide local expertise, global capabilities and supply chain resilience
  • Optimizes footprint servicing customers in 140+ countries through ~400 production facilities, brings global capabilities to local customers and provides local access and expertise to global brands
  • Supports customers in accessing broader growth opportunities and addressing specific regional needs with a balanced geographic presence across continents including in high-growth emerging markets
  • Enhances scale and reach that ensure supply chain resilience in a dynamic world and access to global manufacturing best practices

Compelling Financial Benefits:

• Strong combined financial profile
  • Combined revenues of $24 billion and adjusted EBITDA of $4.3 billion, including run-rate synergies
  • Combined revenue growth above market, accelerating by at least 1%
  • Strong combined annual cash flow1 of over $3 billion, providing significant capacity to fund organic reinvestment, a compelling dividend, value accretive M&A and share repurchases
  • Expected net leverage of 3.3x at close with path to de-lever below 3.0x within first full year
  • Commitment to investment grade balance sheet and continued annual dividend growth from Amcor's current annualized base of $0.51 cents per share. Berry expects to maintain its current dividend policy until the close of the transaction
  • Unlocks further opportunities to refine portfolio, enhancing focus on high-growth, high-margin categories and releasing capital to drive further growth
• $650 million benefit from identified cost, growth and financial synergies by end of third year
  • $530 million annual run-rate pre-tax cost synergies
  • $60 million in annual run-rate financial savings
  • $60 million annual run-rate pre-tax earnings benefit from growth synergies, including from:
    • Increased exposure to higher growth, higher value categories including Healthcare, Protein, Liquids, Pet Food, Beauty & Personal Care and Food Service
    • Combined innovation capabilities to better serve customers and unlock growth opportunities
    • Differentiated commercial capabilities deployed across a broader platform
  • Additional $280 million of one-time cash benefits from working capital efficiencies offsetting approximately $280 million of expected pre-tax costs to achieve synergies
• Significant value creation for all shareholders
  • Over 35% adjusted cash EPS accretion and expected double-digit return on investment2
  • Enhanced long-term shareholder value creation through sustained higher expected earnings growth from 10-15% to 13-18% per annum

Timing and Approvals
The transaction has been unanimously approved by the boards of directors of both Amcor and Berry. Closing is targeted in the middle of calendar year 2025. The closing of the transaction is subject to shareholder approvals, regulatory approvals, and satisfaction of other customary closing conditions.
Board, Management, and Head Office
Peter Konieczny will serve as Chief Executive Officer, Graeme Liebelt will serve as Chairman and Stephen Sterrett will serve as Deputy Chairman of the combined company.
Amcor will maintain its primary listing on the NYSE and its secondary listing on the ASX. The combined entity will be named Amcor plc.
Global Head Office will remain in Zurich, Switzerland. The combined company expects to maintain a significant presence in Evansville, Indiana.
Upon completion of the transaction, Amcor's board of directors will expand to 11 directors, 4 of whom will be nominated by Berry.
Conference Call for Investment Community
Amcor and Berry will host a joint investor conference call at 8.00am US Eastern Time on Tuesday 19 November 2024 / 12.00am Australian Eastern Time on Wednesday 20 November 2024. For those wishing to participate in the call please use the following dial-in numbers:
USA: 800 715-9871 (toll-free) | 646 307-1963 (local)Australia: 1800 519 630 (toll-free) | 02 9133 7103 (local)United Kingdom: 0800 358 0970 (toll-free) | 020 3433 3846 (local)Hong Kong: +852 3002 3410 (local)Singapore: +65 3159 5133 (local)All other countries: +1 646 307-1963 (this is not a toll-free number)Conference ID 3964921
Access to the webcast and supporting materials will be available via the Investors section of each company's website at amcor.com and berryglobal.com. A webcast replay will be available at the conclusion of the call.
Berry will separately release its fourth quarter and fiscal year 2024 earnings release before trading on the New York Stock Exchange begins today, Tuesday, November 19, 2024. As a result of the transaction with Amcor, Berry will no longer host its previously planned quarterly conference call at 10.00am US Eastern Time on Wednesday 20 November 2024 / 2.00am Australian Eastern Time on Thursday 21 November 2024. Berry will post prepared remarks and a presentation regarding its fourth quarter and fiscal year 2024 earnings results on the Company's website at berryglobal.com.
AdvisorsUBS Investment Bank and Goldman Sachs & Co. LLC are acting as financial advisors to Amcor. Kirkland & Ellis LLP is acting as legal advisor to Amcor.
Lazard and Wells Fargo are acting as financial advisors to Berry. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Berry.
Amcor Investor Relations ContactsTracey WhiteheadGlobal Head of Investor RelationsT: +61 408 037 590E: [email protected]
Damien BirdVice President Investor Relations Asia PacificT: +61 481 900 499E: [email protected]
Damon WrightVice President Investor Relations North AmericaT: +1 224 313 7141E: [email protected]
Amcor Media ContactsAustraliaJames StrongManaging DirectorSodali & CoT: +61 448 881 174E: [email protected]
EuropeErnesto DuranHead of Global CommunicationsT: +41 78 698 69 40E: [email protected]
North AmericaJulie LiedtkeDirector, Media RelationsT: +1 847 204 2319E: [email protected]
Berry Investor Relations / Media ContactDustin StilwellVP, Head of Investor RelationsT: +1 812 306 2964E: [email protected]E: [email protected]
About Amcor
Amcor plc is a global leader in developing and producing responsible packaging solutions across a variety of materials for food, beverage, pharmaceutical, medical, home and personal-care, and other products. Amcor works with leading companies around the world to protect products, differentiate brands, and improve supply chains. The Company offers a range of innovative, differentiating flexible and rigid packaging, specialty cartons, closures and services. The company is focused on making packaging that is increasingly recyclable, reusable, lighter weight and made using an increasing amount of recycled content. In fiscal year 2024, 41,000 Amcor people generated $13.6 billion in annual sales from operations that span 212 locations in 40 countries. NYSE: AMCR; ASX: AMC
About Berry
Berry is a global leader in innovative packaging solutions that we believe make life better for people and the planet. We do this every day by leveraging our unmatched global capabilities, sustainability leadership, and deep innovation expertise to serve customers of all sizes around the world. Harnessing the strength in our diversity and industry-leading talent of over 34,000 global employees across more than 200 locations, we partner with customers to develop, design, and manufacture innovative products with an eye toward the circular economy. The challenges we solve and the innovations we pioneer benefit our customers at every stage of their journey.
Important Information for Investors and ShareholdersThis communication does not constitute an offer to sell or the solicitation of an offer to buy or exchange any securities or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. It does not constitute a prospectus or prospectus equivalent document. No offering or sale of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the US Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
In connection with the proposed transaction between Amcor plc ("Amcor") and Berry Global Group, Inc. ("Berry"), Amcor and Berry intend to file relevant materials with the Securities and Exchange Commission (the "SEC"), including, among other filings, an Amcor registration statement on Form S-4 that will include a joint proxy statement of Amcor and Berry that also constitutes a prospectus of Amcor with respect to Amcor's ordinary shares to be issued in the proposed transaction, and a definitive joint proxy statement/prospectus, which will be mailed to shareholders of Amcor and Berry (the "Joint Proxy Statement/Prospectus"). Amcor and Berry may also file other documents with the SEC regarding the proposed transaction. This document is not a substitute for the Joint Proxy Statement/Prospectus or any other document which Amcor or Berry may file with the SEC. INVESTORS AND SECURITY HOLDERS OF AMCOR AND BERRY ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders will be able to obtain free copies of the registration statement and the Joint Proxy Statement/Prospectus (when available) and other documents filed with the SEC by Amcor or Berry through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Amcor will be available free of charge on Amcor's website at amcor.com under the tab "Investors" and under the heading "Financial Information" and subheading "SEC Filings." Copies of the documents filed with the SEC by Berry will be available free of charge on Berry's website at berryglobal.com under the tab "Investors" and under the heading "Financials" and subheading "SEC Filings."