Indiana-headquartered Berry Plastics is purchasing AEP Industries, for a price of $765 million (€683 million). The deal is scheduled to be completed in December 2016. AEP reported net annual sales of $1.1 billion for the financial year closing April 2016.
Berry notes that buying AEP will expand it capacity in the flexible plastic packaging segment in North America. The Smithers Pira report the Future of Flexible Packaging to 2020 estimates that the North American market for this will be worth $38.7 billion in 2016 and climb to a value of $40.7 billion in 2020.
AEP CEO Brendan Barba says: ‘We are excited to announce this compelling transaction with Berry, which delivers substantial value to our shareholders. 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.’
His Berry counterpart Jon Rich adds: ‘We respect and admire the impressive company Brendan Barba has built over the last 40 years and look forward to welcoming AEP employees into Berry’s organisation. 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.’
The new owner estimates these savings could be worth $50 million each year once the merger is completed.
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