Highlights
- Strategic combination to create the
global leader in consumer packaging
- Comprehensive global footprint with
greater scale in every region
- Industry leading R&D capabilities
and better positioned to capture sustainable packaging
opportunities
- Stronger value proposition for
shareholders, customers, employees and the environment
- Combined revenues of US$13 billion,
EBITDA of US$2.2 billion(1), annual cash flow after capital
expenditure of more than US$1 billion and an investment grade
balance sheet
- All-stock cash free transaction: Amcor
shareholders to own 71%; Bemis shareholders to own 29% of combined
company
- Double-digit pro-forma EPS(2) accretion
for all shareholders including run-rate cost synergies of US$180
million incremental to Bemis’ “Agility” improvement plan
- Amcor to establish primary listing on
NYSE with an estimated market capitalization of US$17 billion(3)
and to maintain a listing on ASX, with expected index inclusion in
both markets
Amcor Limited (ASX: AMC) and Bemis Company, Inc. (NYSE: BMS)
today announced that their respective Boards of Directors have
unanimously approved a definitive agreement under which Amcor will
acquire Bemis in an all-stock combination. 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, offer customers and employees
the most compelling value proposition in the packaging industry and
deliver the most sustainable innovations for the environment.
The transaction will be effected at a fixed exchange ratio of
5.1 Amcor shares for each Bemis share, resulting in Amcor and Bemis
shareholders owning approximately 71% and 29% of the combined
company, respectively. This is equivalent to a transaction price of
US$57.75 per Bemis share based on Amcor’s closing share price of
A$15.28(4) on August 3, 2018, and represents a premium of 25% to
Bemis’ closing price of US$46.31 per share as of August 2,
2018(5).
Amcor's CEO, Ron Delia, said: "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’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. 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.”
Bemis’ President and CEO, William F. Austen, said: "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. Our employees will benefit as part of a larger and
more global organization focused on a commitment to customer
service, integrity and supporting strong teams. In addition, the
combination will enable us to offer global, regional and local
customers the most compelling value proposition in the industry
through a broader product portfolio, increased product
differentiation and enhanced operating capabilities, while
leveraging Bemis’ extensive U.S. manufacturing base and strengths
in 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.”
Amcor's CEO, Ron Delia, concluded, “Amcor and Bemis have many
things in common starting with proud histories that date back more
than 150 years. Both companies are grounded in strong values, a
shared commitment to innovation and value-added consumer packaging,
and have talented management teams.”
“We have always had a great deal of respect for Bemis and we are
thrilled that its team in Wisconsin and around the world will be
joining Amcor. Many people at Amcor today have joined us through
acquisitions, including many of our leadership team, and we would
expect Bemis to be well represented in Amcor at all levels of the
organization.”
Strategic Rationale
After completion of the transaction, Amcor will have a stronger
and more differentiated value proposition for global, regional and
local customers through:
- Comprehensive global footprint with
more balanced, profitable exposure to emerging markets: A
global flexible packaging footprint across key geographies; a
larger, more balanced and more profitable emerging markets
business, with sales of some US$3.5 billion from around 30 emerging
markets;
- Greater scale to better serve
customers in every region: Increased economies of scale and
resources through Amcor’s leading positions in Europe, Asia and
Latin America, and Bemis’ leading positions in North America and
Brazil;
- Increased exposure to attractive end
markets and product segments: An enhanced growth profile from
greater global participation in protein and healthcare packaging,
leveraging innovative technologies in barrier films and foils;
- Best-in-class operating and
innovation capabilities: Greater differentiation to innovate
and meet customer demands for new and sustainable products through
the deployment of proven, industry-leading commercial, operational
and R&D capabilities;
- A continued strong commitment to
environmental sustainability: Enhanced capabilities behind
Amcor’s pledge to develop all recyclable or reusable packaging
products by 2025; and
- Greater depth of management
talent: A stronger combined team by bringing the significant
strengths and quality of the workforce across both companies.
Financial Rationale
The combination creates substantial value for shareholders of
both companies through:
- Compelling transaction metrics:
- all-stock acquisition at an implied
value in line with Amcor’s current trading EV/EBITDA multiple, pre
cost synergies;
- pre-tax annual cost synergies of
approximately US$180 million (representing approximately 4% to 5%
of Bemis sales) by the end of the third year from procurement,
manufacturing and G&A efficiencies(6), incremental to Bemis’
“Agility” improvement plan;
- double digit proforma EPS(2) accretion
for all shareholders inclusive of cost synergies at full run
rate(1); and
- double digit returns in excess of
Amcor’s Weighted Average Cost of Capital (WACC).
- Stronger financial profile going
forward:
- higher margins through the delivery of
cost synergies;
- potential to grow at higher rates over
the long term through a stronger customer value proposition; and
increased exposure to attractive segments, which would be additive
to the transaction metrics;
- annual cash flow, after capital
expenditure and before dividends, in excess of US$1 billion;
and
- investment grade balance sheet with
immediate capacity for further investment.
- Greater liquidity for investors:
- through a primary listing on the New
York Stock Exchange (“NYSE”) and a listing on the Australian
Securities Exchange ("ASX") via CHESS Depositary Interests
(“CDI’s”); and
- expected inclusion in both the US
S&P 500 index as well as in the S&P / ASX 200 index.
- Cash and tax free:
- cash and tax free transaction for
shareholders in a share for share exchange.
Transaction Structure
The combination will be effected through a merger of Amcor and
Bemis into a newly created holding company (‘New Amcor’)
incorporated in Jersey. It is intended that New Amcor will be tax
resident in the UK after closing. New Amcor will have a primary
listing on the NYSE and a listing on the ASX. Amcor and Bemis
shareholders will receive shares in New Amcor in a tax-free
exchange. Existing Amcor shareholders will have the option to
receive one New Amcor ASX listed CDI or one New Amcor NYSE listed
share for each Amcor share held. Bemis shareholders will receive
5.1 New Amcor NYSE shares for each Bemis share held, resulting in
Amcor and Bemis shareholders owning approximately 71% and 29% of
the combined company, respectively.
This structure has several key benefits, including:
- Listings on two major global exchanges
with primary listing on the NYSE and an ASX listing via CDIs;
- Expected index inclusion in the S&P
500 of the full market capitalization of the combined company
(estimated at US$17 billion(3)) and pro-rata inclusion of CDIs in
the S&P / ASX 200 index, resulting in greater liquidity and
considerably increased index buying; and
- Ongoing financial strength and funding
flexibility for continued investment.
Financial effects
After completion of the transaction it is expected that key
aspects of Amcor’s financial profile will remain largely unchanged,
including:
- A compelling, progressive dividend
which will continue to be an important component of annual
shareholder returns;
- Post closing, the first annual dividend
paid by New Amcor is expected to be no less than the value of the
last annual dividend per share declared by Amcor prior to
completion of the transaction, providing significant dividend per
share accretion to Bemis shareholders; and
- An on-going capital allocation
philosophy consistent with Amcor’s shareholder value creation
framework.
Governance and Community
Upon completion of the transaction, New Amcor’s Board is
expected to comprise 11 members, 8 of whom are current Amcor
directors, and 3 of whom are current Bemis directors. Amcor’s
current Chairman, Graeme Liebelt and current CEO Ron Delia will
continue in those roles after the transaction and Mr. Delia will
continue to serve as the only Executive Director on the Board.
New Amcor will continue to maintain a critical presence in
Wisconsin and other key Bemis locations. The combined company also
expects to leverage Bemis’ plant network and innovation center
while continuing to invest in the U.S. New Amcor will continue to
support the communities in which Bemis operates and announced today
a contribution of US$35,000 to the Bemis Foundation on behalf of
Amcor’s 35,000 employees world-wide.
Conditions to the Transaction and Other Terms
Closing of the transaction is conditional upon the receipt of
regulatory approvals, approval by both Amcor and Bemis
shareholders, and satisfaction of other customary conditions.
Subject to the satisfaction of the conditions to closing, the
transaction is targeted to close in the first quarter of calendar
year 2019.
Under the terms of the transaction agreement, prior to closing
each party will be permitted to continue paying dividends in an
amount and on timing consistent with past practice.
The full terms of the transaction, including the closing
conditions and other terms described herein, are set out in the
transaction agreement, which is lodged in a separate
announcement.
Analyst and investor briefing
Amcor and Bemis will hold two joint calls for analysts and
investors:
- Conference call 1 – August 6: 8:30 am
US Central Daylight Time / 9:30 am US Eastern Daylight Time / 11:30
pm Australian Eastern Standard Time. Participant code
8388696
- Conference call 2 – August 7 Australia
/ August 6 US: 10:00 am Australian Eastern Standard Time / 07:00 pm
US Central Daylight Time / 08:00 pm US Eastern Daylight Time.
Participant code 9992019
To access the presentation slides, go to www.Amcor.com and click
on the relevant link after scrolling down on the homepage or the
investors page, or go to www.Bemis.com and click on the
presentations section. We recommend participants dial in 10 to 15
minutes prior to the start of the presentation using the
teleconference details below:
Australia 1800 175 864 / +61 2 8373 3507 United
States 1855 823 0291 / +1 469 666 9932 Canada 1855 277 1647 / +1 64
7426 9741 United Kingdom 0808 234 1368 / +44 20 3651 4875 Hong Kong
800 963 435 / +852 3051 2791 All other countries +61 2 8373 3550
Advisors
UBS AG, Australia Branch and Moelis & Company LLC are acting
as joint financial advisors and Kirkland & Ellis and Herbert
Smith Freehills as legal counsel to Amcor.
Goldman Sachs & Co LLC is acting as financial advisor and
Faegre Baker Daniels LLP, Cleary Gottlieb Steen & Hamilton LLP
and MinterEllison as legal counsel to Bemis.
Overview of Amcor
Amcor is a global leader in responsible packaging solutions,
supplying a broad 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.
Overview of Bemis
Bemis Company, Inc. (“Bemis”) is a supplier of flexible and
rigid plastic packaging used by leading food, consumer products,
healthcare, and other companies worldwide. 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 individuals
worldwide. More information about Bemis is available at our
website, www.Bemis.com.
FOOTNOTES
1) After taking into account US$180 million pre-tax
cost synergies. 2) Excludes the impact of purchase accounting. 3)
Excluding the value of capitalized synergies. 4) Equivalent to a US
dollar share price of US$11.32 based on a AUD:USD exchange rate of
0.7411 as of August 3, 2018. 5) August 2, 2018 being the last
trading day prior to market speculation on August 3, 2018 in
relation to a transaction between Amcor and Bemis. 6) Cost to
achieve synergies estimated to be US$150 million. These costs are
expected to be funded by capital expenditure and working capital
savings. Costs are expected to be incurred across years 1 and 2.
Cautionary Statement Regarding
Forward-Looking Statements
This communication contains certain statements that are
“forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the
Securities Exchange Act of 1934, as amended. Amcor Limited
(“Amcor”), its subsidiary Arctic
Jersey Limited (“New Amcor”) and Bemis
Company, Inc. (“Bemis”) have
identified some of these forward-looking statements with words like
“believe,” “may,” “could,” “would,” “might,” “possible,” “will,”
“should,” “expect,” “intend,” “plan,” “anticipate,” “estimate,”
“potential,” “outlook” or “continue,” the negative of these words,
other terms of similar meaning or the use of future dates.
Forward-looking statements in this communication include, without
limitation, statements about the anticipated benefits of the
contemplated transactions, including future financial and operating
results and expected synergies and cost savings related to the
contemplated transactions, the plans, objectives, expectations and
intentions of Amcor, New Amcor or Bemis and the expected timing of
the completion of the contemplated transactions. Such statements
are based on the current expectations of the management
of Amcor or Bemis, as applicable, are qualified by the
inherent risks and uncertainties surrounding future expectations
generally, and actual results could differ materially from those
currently anticipated due to a number of risks and uncertainties.
None of Amcor, New Amcor or Bemis, or any of their respective
directors, executive officers or advisors, provide any
representation, assurance or guarantee that the occurrence of the
events expressed or implied in any forward-looking statements will
actually occur. Risks and uncertainties that could cause results to
differ from expectations include, but are not limited to:
uncertainties as to the timing of the contemplated transactions;
uncertainties as to the approval of the transactions by Bemis’ and
Amcor’s shareholders, as required in connection with the
contemplated transactions; the possibility that a competing
proposal will be made; the possibility that the closing conditions
to the contemplated transactions may not be satisfied or waived,
including that a governmental entity may prohibit, delay or refuse
to grant a necessary approval; the effects of disruption caused by
the announcement of the contemplated transactions or the
performance of the parties’ obligations under the transaction
agreement making it more difficult to maintain relationships with
employees, customers, vendors and other business partners; the risk
that shareholder litigation in connection with the contemplated
transactions may affect the timing or occurrence of the
contemplated transactions or result in significant costs of
defense, indemnification and liability; uncertainties as to the
availability and terms of refinancing for the existing indebtedness
of Amcor or Bemis in connection with the contemplated transactions;
uncertainties as to whether and when New Amcor may be listed in the
US S&P 500 index and the S&P / ASX 200 index; uncertainties
as to whether, when and in what amounts future dividend payments
may be made by Amcor, Bemis or New Amcor; other business effects,
including the effects of industry, economic or political conditions
outside of the control of the parties to the contemplated
transactions; transaction costs; actual or contingent liabilities;
disruptions to the financial or capital markets; other risks and
uncertainties discussed in Amcor’s disclosures to the Australian
Securities Exchange (“ASX”), including
the “2017 Principal Risks” section of Amcor’s Annual Report 2017;
and other risks and uncertainties discussed in Bemis’ filings with
the U.S. Securities and Exchange Commission (the “SEC”), including the “Risk Factors” section of
Bemis’ annual report on Form 10-K for the fiscal year ended
December 31, 2017. You can obtain copies of Amcor’s
disclosures to the ASX for free at ASX’s website (www.asx.com.au).
You can obtain copies of Bemis’ filings with the SEC for free at
the SEC’s website (www.sec.gov). Forward-looking statements
included herein are made only as of the date hereof and none of
Amcor, New Amcor or Bemis undertakes any obligation to update any
forward-looking statements, or any other information in this
communication, as a result of new information, future developments
or otherwise, or to correct any inaccuracies or omissions in them
which become apparent, except as expressly required by law. All
forward-looking statements in this communication are qualified in
their entirety by this cautionary statement.
Legal Disclosures
No Offer or Solicitation
This communication is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote or approval in any jurisdiction, nor
shall there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. No offer of
securities will be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act.
Important Additional Information Will Be Filed with the
SEC
In connection with the contemplated transactions, New Amcor
intends to file a registration statement on Form S-4 with the
SEC that will include a joint proxy statement of Bemis and
prospectus of New Amcor. The joint proxy statement/prospectus will
also be sent or given to Bemis shareholders and will contain
important information about the contemplated
transactions. Shareholders are urged to read the joint
proxy statement/prospectus and other relevant documents filed or to
be filed with the SEC carefully when they become available because
they will contain important information about Bemis, Amcor, New
Amcor, the contemplated transactions and related matters.
Investors and shareholders will be able to obtain free copies of
the joint proxy statement/prospectus (when available) and other
documents filed with the SEC by Bemis, Amcor and New Amcor through
the SEC’s website (www.sec.gov).
Participants in the Solicitation
Bemis, Amcor, New Amcor and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from Bemis shareholders in connection with
the contemplated transactions. Information about Bemis’ directors
and executive officers is set forth in its proxy statement for its
2018 Annual Meeting of Shareholders and its annual report on
Form 10-K for the fiscal year ended December 31, 2017,
which may be obtained for free at the SEC’s website
(www.sec.gov). Information about
Amcor’s directors and executive officers is set forth in its Annual
Report 2017, which may be obtained for free at ASX’s website
(www.asx.com.au). Additional information regarding the interests of
participants in the solicitation of proxies in connection with the
contemplated transactions will be included in the joint proxy
statement/prospectus that New Amcor intends to file with the
SEC.
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CONTACTS FOR AMCORInvestorsAMCOR LimitedTracey
Whitehead, +61 3 9226 9028Head of Investor
Relationstracey.whitehead@amcor.comorMedia -
AustraliaCitadel-MAGNUSJames Strong, +61 4 4888
1174jstrong@citadelmagnus.comMedia – North
AmericaKekstDaniel Yunger, + 1
212-521-4879daniel.yunger@kekst.comMedia – EuropeAMCOR
LimitedTR Reid, +41 44 316 7674Head of Global
CommunicationsorCONTACTS FOR BEMISInvestorsBemis
Company Inc.Erin M. Winters, 920-527-5288Director of Investor
RelationsorMediaJoele Frank, Wilkinson Brimmer
KatcherMatthew Sherman / Sharon Stern, 212-355-4449
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