US-based consumer packaging company Berry Plastics has signed a definitive merger agreement to purchase AEP Industries for an aggregate consideration of $765m.
This cash and stock deal includes AEP’s net debt and each AEP shareholder will receive either $110 in cash or 2.5011 shares of Berry common stock per AEP share in the transaction.
The deal is also subject to an overall 50/50 proration to ensure half of the total outstanding AEP shares are exchanged for cash consideration. Once completed, AEP shareholders will own nearly 5% of Berry Plastics on a complete diluted basis.
Subject to customary closing conditions, the deal is expected to be completed in December.
Berry Plastics' chairman and CEO Jon Rich said: “AEP, together with Berry’s Engineered Materials Division, creates an impressive packaging film producer serving the North American market.
“This unique combination offers the opportunity for significant value creation for Berry and AEP shareholders alike, as we realise procurement and operating cost savings across the two organisations.”
Berry Plastics currently provides various products, including open and closed top packaging, polyethylene-based plastic films, industrial tapes, medical specialties, flexible packaging, heat-shrinkable coatings, specialty laminates, and flexible intermediate bulk containers (FIBC) or bulk bags.
AEP Industries' chairman and CEO J. Brendan Barba said: “We believe Berry is the right partner to expand our product portfolio to deliver high quality packaging films to even more customers around the world.
“Berry shares our commitment to teamwork and success, and we are confident our valued employees will benefit from the opportunities that come from being part of a larger company.
“We look forward to working with Berry to plan for a seamless integration for our customers and employees and to begin the next chapter in the company’s history."