The Amcor Limited (ASX: AMC) share price has been volatile in early trade this morning after it cleared another regulatory hurdle in its bid to merge with Bemis Company, Inc. (NYSE: BMS).
What did Amcor announce?
Amcor and Bemis announced that it has received unconditional antitrust clearance with no remedial action from the Brazilian Administrative Council for Economic Defense (CADE).
The transaction remains subject to regulatory approval in the United States having previously been given the green light by the European regulators to go ahead with the transaction.
The companies are in advanced discussions with the US Department of Justice (DOJ) which includes the potential for required remedies.
Inclusive of remedies required by the European Commission, collective potential remedies would represent an immaterial proportion of the total sales for the combined company and would not impact the US$180 million of net cost synergies expected to be delivered by the end of the third year following completion.
As previously announced, completion of the transaction is expected to occur on 15 May 2019.
Is Amcor in the buy basket?
The Amcor share price has rocketed higher so far this year and is trading just shy of its 52-week high of $15.58 per share ($15.42 at the time of writing).
The packaging company's share price has outperformed fellow ASX packaging group Orora Ltd (ASX: ORA) and Pact Group Holdings Ltd (ASX: PGH) which are both in the red so far this year.
The proposed Bemis merger is expected to be voted on in May 2019 and I'd expect to see some more share price volatility for Amcor in the lead-up to the vote. The proposed merger aside, I'm not particularly bullish on the packaging sector in Australia as a solid long-term growth play.
For those looking for a more high-risk, high-reward growth play, this top-rated stock in a booming new-age industry could be the perfect portfolio fit.
