The all-stock deal would be priced at about $57.75 per Bemis share, a premium of about 25 percent on Bemis’ Aug. 2 closing price of $46.31 per share. As of June 30, Bemis had 91 million weighted average common shares outstanding, according to an SEC filing, which would equate to about $5.3 billion. Amcor would also take on Bemis’ debt, for a total $6.8 billion price. The cash-free transaction is expected to close in the first quarter of 2019, and would be tax-free to shareholders.
The consumer packaging companies would have about $13 billion in combined revenues, and approximately $2.2 billion in EBITDA. Together, the companies employ 51,000 people worldwide.
Amcor, which has its corporate headquarters in Zurich, Switzerland and its head office in Melbourne, Australia, would start a primary listing on the New York Stock Exchange at a $17 billion market capitalization, while continuing to be listed on the Australian Securities Exchange.
Ron Delia, chief executive officer of Amcor, emphasized in a statement that the deal is expected to benefit shareholders of both companies and the strategic combination will create a leading global packaging company.
“Amcor’s financial profile will be enhanced, and our existing capital allocation framework, or shareholder value creation model, will be maintained and strengthened with this transaction,” Delia said. “The combined company expects to have an investment grade balance sheet that provides immediate capacity for further disciplined investment as well as a compelling, progressive dividend. Amcor will draw on our extensive merger integration experience to deliver the substantial benefits of this combination.”
Delia indicated Amcor expects Bemis employees to be “well represented” at Amcor, and the company plans to “maintain a critical presence in Wisconsin and other key Bemis locations.” An 11-member board of directors would include eight existing Amcor board members and three existing Bemis directors. Delia will continue to serve as CEO.
“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,” said William Austen, president and CEO of Bemis, in a statement.
Austen said employees and customers would benefit from being part of the larger organization, with an expanded product portfolio, a broader geographic reach and upgraded operating capabilities. He pointed to Bemis’ strengths in U.S. manufacturing, material science and innovation.
“Our shareholders will receive a significant premium in this transaction, reflecting the value we’ve built as an organization, as well as the opportunity to continue to participate in the upside potential of a more diversified combined company with greater scale and resources. We look forward to working together with Amcor to ensure a seamless integration,” Austen said.
Bemis ranked 597 on the 2018 Fortune 1000 list with $4 billion in annual revenue.