Berry and Glatfelter Announce Additional Regulatory Milestone in Proposed Transaction for Spin-Off and Merger of Berry’s Health, Hygiene and Specialties Global Nonwovens and Films Business with Glatfelter

Rhea-AI Summary

Berry Global Group (NYSE: BERY) and Glatfelter (NYSE: GLT) have achieved a new regulatory milestone in their proposed transaction to combine Berry's Health, Hygiene, and Specialties (HHNF) Global Nonwovens and Films business with Glatfelter. This comes after the expiration of the Hart-Scott-Rodino (HSR) waiting period and receiving all necessary competition and foreign investment law approvals. Announced on February 7, 2024, this Reverse Morris Trust transaction aims to create a leading publicly-traded company in the specialty materials industry. The transaction, expected to close in the second half of 2024, is subject to Glatfelter shareholder approval and other customary conditions.

Positive

• Completion of regulatory milestones, including HSR and competition law approvals.
• Formation of a leading, publicly-traded company in the specialty materials industry.
• Expected closure of the transaction in the second half of 2024, pending Glatfelter shareholder approval and customary conditions.

Negative

• None.

Insights

Financial Analyst

The announcement that Berry Global Group and Glatfelter Corporation have cleared an additional regulatory milestone in their proposed spin-off and merger is noteworthy for investors. This transaction involves merging Berry’s Health, Hygiene and Specialties segment with Glatfelter, forming a new entity in the specialty materials industry. The regulatory clearance reduces uncertainty surrounding the deal, which is often a positive signal to the market.

Financially, this transaction could be beneficial for both companies. By spinning off a segment, Berry could streamline its operations and focus on its core businesses, potentially improving profitability and operational efficiency. Glatfelter, on the other hand, will acquire a significant segment that can enhance its product offerings and market position. Investors should consider the potential earnings growth and cost synergies that might arise post-merger. However, it's also important to be aware of integration risks and any potential disruption during the transition period.

Concerning industry norms, such transactions typically aim for long-term value creation through strategic alignment and synergy realization. Given the regulatory milestones achieved and the pending shareholder approval, the likelihood of deal completion appears high, presenting potential upside for investors who are patient enough to wait for the integration benefits to materialize.

Overall, while the transaction promises long-term benefits, short-term volatility might be expected as markets digest the news and the companies transition through the merger process. Investors should keep an eye on future earnings reports and any further announcements about the integration process.

Market Research Analyst

This merger will create a stronger entity in the specialty materials market, which can drive competitive advantage. From a market perspective, the combined entity will likely have an expanded product portfolio and greater market reach, positioning it well against competitors. This enhanced positioning can translate into improved market share and stronger pricing power.

It's also important to consider the market dynamics of the specialty materials industry. This sector is competitive but rewarding for companies that can innovate and reduce costs. The merger provides an opportunity to capitalize on economies of scale and potentially drive innovation through combined R&D efforts. Investors should assess how the new entity plans to leverage these opportunities to stay competitive.

However, the market will also be watching how the integration unfolds. Effective integration is critical to realizing these benefits. Challenges such as aligning corporate cultures, integrating operations and achieving anticipated synergies could impact the timeline and the extent of success. Investors should monitor updates on these fronts to gauge progress and potential impact on the stock price.

For retail investors, understanding these market dynamics and the company's strategic vision post-merger can provide a clearer picture of potential investment returns. Be mindful of the long-term vision while keeping a close watch on short-term execution risks.

EVANSVILLE, Ind.--(BUSINESS WIRE)-- Berry Global Group, Inc. (NYSE: BERY) and Glatfelter Corporation (NYSE: GLT) announced today the achievement of an additional regulatory milestone in the proposed transaction involving the combination of a majority of Berry’s Health, Hygiene and Specialties segment to include its Global Nonwovens and Films business (“HHNF”) with Glatfelter. In addition to the previously announced expiration of the required waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act, the parties have now received all other approvals and clearances under competition and foreign direct investment laws which were conditions to the consummation of the transaction.

As previously announced on February 7, 2024, Berry and Glatfelter entered into a definitive agreement under which Berry will spin-off and merge its HHNF business with Glatfelter in a Reverse Morris Trust transaction. The transaction will create a leading, publicly-traded company in the specialty materials industry.

The transaction is expected to close in the second half of calendar 2024 and is subject to approval by Glatfelter shareholders and completion of the remaining customary closing conditions.

Cautionary Statement Concerning Forward-Looking Statements

Statements in this release that are not historical, including statements relating to the expected timing, completion and effects of the proposed transaction between Berry Global Group, Inc., a Delaware corporation (“Berry”), and Glatfelter Corporation, a Pennsylvania corporation (“Glatfelter” or the “Company”), are considered “forward-looking” within the meaning of the federal securities laws and are presented pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “would,” “could,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “projects,” “outlook,” “anticipates” or “looking forward,” or similar expressions that relate to strategy, plans, intentions, or expectations. All statements relating to estimates and statements about the expected timing and structure of the proposed transaction, the ability of the parties to complete the proposed transaction, benefits of the transaction, including future financial and operating results, executive and Board transition considerations, the combined company’s plans, objectives, expectations and intentions, and other statements that are not historical facts are forward-looking statements. In addition, senior management of Berry and Glatfelter, from time to time may make forward-looking public statements concerning expected future operations and performance and other developments.

Actual results may differ materially from those that are expected due to a variety of factors, including without limitation: the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed transaction; the risk that Glatfelter shareholders may not approve the transaction proposals; the risk that the necessary regulatory approvals may not be obtained or may be obtained subject to conditions that are not anticipated or may be delayed; risks that any of the other closing conditions to the proposed transaction may not be satisfied in a timely manner; risks that the anticipated tax treatment of the proposed transaction is not obtained; risks related to potential litigation brought in connection with the proposed transaction; uncertainties as to the timing of the consummation of the proposed transaction; unexpected costs, charges or expenses resulting from the proposed transaction; risks and costs related to the implementation of the separation of the business, operations and activities that constitute the global nonwovens and hygiene films business of Berry (the “HHNF Business”) into Treasure Holdco, Inc., a Delaware corporation and a wholly owned subsidiary of Berry (“Spinco”), including timing anticipated to complete the separation; any changes to the configuration of the businesses included in the separation if implemented; the risk that the integration of the combined company is more difficult, time consuming or costly than expected; risks related to financial community and rating agency perceptions of each of Berry and Glatfelter and its business, operations, financial condition and the industry in which they operate; risks related to disruption of management time from ongoing business operations due to the proposed transaction; failure to realize the benefits expected from the proposed transaction; effects of the announcement, pendency or completion of the proposed transaction on the ability of the parties to retain customers and retain and hire key personnel and maintain relationships with their counterparties, and on their operating results and businesses generally; and other risk factors detailed from time to time in Glatfelter’s and Berry’s reports filed with the Securities and Exchange Commission (“SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC. These risks, as well as other risks associated with the proposed transaction, will be more fully discussed in the registration statements, proxy statement/prospectus and other documents that will be filed with the SEC in connection with the proposed transaction. The foregoing list of important factors may not contain all of the material factors that are important to you. New factors may emerge from time to time, and it is not possible to either predict new factors or assess the potential effect of any such new factors. Accordingly, readers should not place undue reliance on those statements. All forward-looking statements are based upon information available as of the date hereof. All forward-looking statements are made only as of the date hereof and neither Berry nor Glatfelter undertake any obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Additional Information and Where to Find It

This communication may be deemed to be solicitation material in respect of the proposed transaction between Berry and Glatfelter. In connection with the proposed transaction, Berry and Glatfelter intend to file relevant materials with the SEC, including a registration statement on Form S-4 by Glatfelter that will contain a proxy statement/prospectus relating to the proposed transaction. In addition, Spinco expects to file a registration statement in connection with its separation from Berry. This communication is not a substitute for the registration statements, proxy statement/prospectus or any other document which Berry and/or Glatfelter may file with the SEC. STOCKHOLDERS OF BERRY AND GLATFELTER ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain copies of the registration statements and proxy statement/prospectus (when available) as well as other filings containing information about Berry and Glatfelter, as well as Spinco, without charge, at the SEC’s website, www.sec.gov. Copies of documents filed with the SEC by Berry or Spinco will be made available free of charge on Berry’s investor relations website at ir.berryglobal.com. Copies of documents filed with the SEC by Glatfelter will be made available free of charge on Glatfelter's investor relations website at www.glatfelter.com/investors.

No Offer or Solicitation

This communication is for informational purposes only and is not intended to and does not constitute an offer to sell, or the solicitation of an offer to sell, subscribe for or buy, or a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, sale or solicitation would be unlawful, prior to registration or qualification under the securities laws of any such jurisdiction. No offer or sale of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

Participants in Solicitation

Berry and its directors and executive officers, and Glatfelter and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from the holders of Glatfelter common stock and/or the offering of securities in respect of the proposed transaction. Information about the directors and executive officers of Berry, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth under the caption “Security Ownership of Beneficial Owners and Management” in the definitive proxy statement for Berry’s 2024 Annual Meeting of Stockholders, which was filed with the SEC on January 4, 2024 (www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0001378992/000110465924001073/tm2325571d6_def14a.htm). Information about the directors and executive officers of Glatfelter including a description of their direct or indirect interests, by security holdings or otherwise, is set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in the proxy statement for Glatfelter's 2024 Annual Meeting of Shareholders, which was filed with the SEC on March 26, 2024 (www.sec.gov/ix?doc=/Archives/edgar/data/0000041719/000004171924000013/glt-20240322.htm). In addition, Curt Begle, the current President of Berry’s Health, Hygiene & Specialties Division, will be appointed as Chief Executive Officer, James M. Till, the current Executive Vice President and Controller of Berry, will be appointed as Executive Vice President, Chief Financial Officer & Treasurer, and Tarun Manroa, the current Executive Vice President and Chief Strategy Officer of Berry, will be appointed as Executive Vice President, Chief Operating Officer, of the combined company. Investors may obtain additional information regarding the interest of such participants by reading the proxy statement/prospectus regarding the proposed transaction when it becomes available.

About Berry

At Berry Global Group, Inc. (NYSE: BERY), we create innovative packaging solutions that we believe make life better for people and the planet. We do this every day by leveraging our unmatched global capabilities, sustainability leadership, and deep innovation expertise to serve customers of all sizes around the world. Harnessing the strength in our diversity and industry-leading talent of over 40,000 global employees across more than 250 locations, we partner with customers to develop, design, and manufacture innovative products with an eye toward the circular economy. The challenges we solve and the innovations we pioneer benefit our customers at every stage of their journey. For more information, visit our website, or connect with us on LinkedIn or Twitter. (BERY-F)

About Glatfelter

Glatfelter is a leading global supplier of engineered materials with a strong focus on innovation and sustainability. The Company’s high-quality, technology-driven, innovative, and customizable nonwovens solutions can be found in products that are Enhancing Everyday Life®. These include personal care and hygiene products, food and beverage filtration, critical cleaning products, medical and personal protection, packaging products, as well as home improvement and industrial applications. Headquartered in Charlotte, NC, the Company’s 2023 revenue was $1.4 billion with approximately 2,980 employees worldwide. Glatfelter’s operations utilize a variety of manufacturing technologies including airlaid, wetlaid and spunlace with fifteen manufacturing sites located in the United States, Canada, Germany, France, Spain, the United Kingdom, and the Philippines. The Company has sales offices in all major geographies serving customers under the Glatfelter and Sontara® brands. Additional information about the Company may be found on our website at www.glatfelter.com or connect with us on LinkedIn.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240625607390/en/

Berry Global, Inc.

Investor Contact

Dustin Stilwell

VP, Investor Relations

+1 812.306.2964

ir@berryglobal.com

Global Media Contact

Laci Scourfield

+1 812.250.3884

mediarelations@berryglobal.com

Glatfelter Corporation

Investor Contact

Ramesh Shettigar

+1 717.225.2746

Ramesh.Shettigar@glatfelter.com

Media Contact

Eileen L. Beck

+1 717.225.2793

Eileen.Beck@glatfelter.com

Source: Berry Global Group, Inc. and Glatfelter Corporation

FAQ

What is the latest milestone in the Berry and Glatfelter transaction?

The latest milestone is the achievement of all required regulatory approvals, including competition and foreign direct investment clearances.

When was the Berry and Glatfelter agreement announced?

The agreement was announced on February 7, 2024.

What is the expected closing date for the Berry and Glatfelter transaction?

The transaction is expected to close in the second half of 2024.

What businesses are involved in the Berry and Glatfelter merger?

The merger involves Berry's Health, Hygiene, and Specialties Global Nonwovens and Films business (HHNF) with Glatfelter.

Why is the Berry and Glatfelter transaction significant?

The transaction will create a leading, publicly-traded company in the specialty materials industry.

What is a Reverse Morris Trust transaction?

A Reverse Morris Trust transaction is a tax-efficient way to spin off and merge a subsidiary with another company.