Berry Global Group, has announced a recommended superior offer to acquire all of the issued and to be issued ordinary share capital of RPC Group for 793 pence ($10.52) per share in cash. Total price will be approx £5 billion ($6.5 billion) including refinancing of RPC’s net debt. The buyout will make Berry a global leader in plastic packaging solutions.

Berry and RPC are two companies with complementary plastic packaging product offerings and strong cultural compatibility. The combined company will have combined revenue of approximately $13 billion and approximately 48,000 employees across six continents, said Berry in a press release. The board of directors of RPC has unanimously recommended the superior offer by Berry. The proposed transaction, which is subject to customary closing conditions, is expected to close early in the third quarter of calendar year 2019.

Berry has secured a fully-committed debt financing package to fund the transaction, and intends to utilise the enhanced free cash flow of the combined business to reduce leverage quickly from expected proforma net leverage of approximately 5.0x at close. As part of the transaction, Berry expects to generate approximately $150 million of annual cost synergies.

Goldman Sachs and Wells Fargo Securities are retained as joint lead financial advisors to Berry. Freshfields Bruckhaus Deringer LLP and Bryan Cave Leighton Paisner LLP are retained as legal advisors for Berry. JPMorgan is also retained as a financial advisor to Berry. Goldman Sachs and Wells Fargo Securities provided fully-committed financing in connection with the transaction.

“We are extremely excited about the opportunity to welcome the team and global capabilities of RPC to the Berry organisation. We are highly impressed by the tremendous depth of talent and resources embedded within RPC, and are looking forward to the opportunity to strengthen our combined platform with the wealth of experience and expertise this team has to offer,” said Tom Salmon, chairman and CEO of Berry.

“We believe this transaction will further enhance the long-term outlook for our business and will provide a unique value creation opportunity for our shareholders. We plan to leverage our combined know-how in material science, product development, supply chain and manufacturing technologies across resin-based applications to integrate quickly and build a best-in-class organisation,” added Salmon. (PC)