Packaging giant Amcor unveils merger with US rival Berry in $13b mega deal

Australian-made packaging giant Amcor plans to wrap up US rival Berry Group in a $13 billion deal aimed at boosting their global grunt.

In a merger proposal requiring shareholder approvals, current Amcor shares will comprise more than two-thirds of the issued capital of a group with annual turnover tipped to hit $US24 billion ($37 million).

Amcor is a major global player in food and drink containers, as well as packaging for medical and pharmaceutical industries. Berry is a big player in food and drink packaging, as well as in tough bottles and vials.

The suitor said the merger would strengthen their respective positions in high-growth, high-value areas — including healthcare, pet food, liquids, beauty and personal care and food.

Berry chief executive Kevin Kwilinski said he expected the merged group “ to better serve customers through a comprehensive and innovative consumer packaging portfolio and a complementary geographic coverage”.

Amcor chief executive Peter Konieczny said the deal would deliver on his group’s strategy of accelerating growth by putting customers first and orientating its “portfolio towards 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,” Mr Konieczny said.

“We will help global and local customers grow faster and operate more efficiently with a team of exceptional talent.”

This team would include 10 innovation centres around the world, with 1500 research and development specialists operating with an annual budget exceeding $US180 million, Amcor said in a statement.

The combined group would be run from Amcor’s current Zurich home with Mr Konieczny as its chief executive and Amcor chair Graeme Liebelt keeping the top board role. Berry chair Stephen Sterrett would be Mr Liebelt’s deputy.

The merged entity would enjoy $US4.5 billion of what Amcor described as an “adjusted” earnings before interest, tax, depreciation and amortisation (EBITDA).

Amcor reported an adjusted EBITDA of $US1.96b for 2023-24 after adding back $US180m of hits that featured $US53m of losses from hyperinflation in Argentina and $US97m of net restructuring costs.

Amcor will remain listed on the New York and Australian stock exchanges.

After the deal was unveiled overnight in New York, Amcor shares fell 2.5 per cent in early ASX trading.

They recovered slightly to close down 1.2 per cent at $15.51.

Berry had surged 3.5 per cent in after-hours trading in New York to $US68.50 ($101).

Under the proposed deal, Amcor will issue 7.25 of its shares for each Berry share.