Amcor (ASX: AMC: NYSE: AMCR) inched close to its long awaited acquisition of New York listed counterpart Berry Group following fresh revelations that two key investors have given the deal the thumbs up.
Having received support from both U.S.-based institutional investor EdgePoint Investment Group and activist investor Ancora, which control around 13% and 4% of Berry respectively, Amcor is closing in what will be the largest industrials merger and acquisitions transaction in Australia in 17 years.
It’s understood these two key investors have offered their backing after concluding that the potential impact of the merger - which needs on the 51% acceptance to get up - could deliver 60% upside. Initial estimates suggest a combined platform will boost Amcor’s annual sales from around US$14 billion (A$21.945 billion) to $23.9 billion - including around $280 million in top-line growth synergies.
The merger vote is expected to go to before shareholders, including 25% Australian-based institutional investors, over the next six months. The proposed scrip merger deal will see Berry shareholders receive 7.25 Amcor share, which values the New York listed stock at $73.59, up around 10% on Berry previously traded price.
By acquiring Berry, a world leader in plastic consumer containers and closures Amcor will not only consolidate its position as the world’s biggest packing group but also move into the S&P Index which tracks the performance of the top 500 largest publicly listed stocks in the US.
This should help to rerate the stock’s share price, however, Amcor’s popularity with short sellers (2.04%) will also impact the share price moving forward.