Comprehensive M&A data with integrated detailed company information

Amcor is discussing a USD 5bn+ acquisition of plastic packaging firm Bemis: WSJ
Posted on Monday, 06 August 2018 09:18
Australia’s Amcor is in the late stages of discussions to acquire US-based packaging rival Bemis, which at a typical takeover premium, could be worth more than USD 5.00 billion, people familiar with the matter told the Wall Street Journal (WSJ).

While sources did not disclose the terms being negotiated, they did note an announcement could be made as soon as this week.

Following the WSJ report, Amcor requested a trading halt pending an agreement for an acquisition, putting additional fuel on the fire that it is considering buying Bemis.

More insiders close to the potential offer told the Financial Times that a deal is expected to be an all-stock transaction and will not only boost the buyer’s global footprint but also provide it with a backdoor listing in the US.

However, despite the signs pointing to an acquisition, a spokesman for Amcor declined to comment when asked about the possible purchase by Reuters.

Bloomberg observed that as businesses go plastic free with supermarkets no longer giving out free plastic bags and bars and restaurants cutting out plastic straws in favour of paper ones, Amcor is making a bet that such changes will not reduce demand for these products.

If a transaction does go ahead and does not fall apart at the last minute, a source told the news provider that it would make the combined company the largest producer of non-paper packaging globally.

A potential acquisition of Bemis by Amcor has made headlines for over a year, with the latest WSJ article sending shares in the potential target up 11.3 per cent to USD 51.53 on 3rd August, valuing the group at around USD 4.20 billion.

Bloomberg cited consultancy firm Smithers Pira as saying demand for flexibles and rigid plastics is expected to grow at a compound annual growth rate of 4.3 per cent and 3.9 per cent, respectively, through 2022.

Amcor is worth around AUD 18.00 billion (USD 13.31 billion) and produces packaging for food and drinks industries, with 35,000 employees across 200 plants in 40 countries worldwide.

The group is billed as the largest of its kind in Australia and is on track to become one of the biggest packing companies in the world.

Bemis has around 16,000 staff across 57 plants globally, supplying to the consumer products, medical and pharmaceutical markets.

It generated net sales of USD 2.06 billion in the six months to 30th June 2018, up slightly from USD 2.01 billion in the corresponding period of 2017.

© Zephus Ltd