ASX 200 stock slides on huge $13 billion buyout news

ASX 200 investors are mulling over the $13 billion merger implications on Wednesday.

| More on:
Woman looking at her tablet at a warehouse.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

S&P/ASX 200 Index (ASX: XJO) stock Amcor PLC (ASX: AMC) is slipping today.

Shares in the global packaging giant closed yesterday trading for $15.70. In morning trade on Wednesday, shares are swapping hands for $15.28 apiece, down 2.7%.

For some context, the ASX 200 is down 0.2% at this same time.

Created with Highcharts 11.4.3Amcor Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Amcor shares also trade in the United States on the New York Stock Exchange. Overnight shares dipped 2.6% on the NYSE.

This comes amid big news of a $13 billion merger.

Here's what's happening with the ASX 200 stock.

ASX 200 stock expanding its horizons

Investors awoke this morning to the news that Amcor is acquiring US-based Berry Global Group Inc (NYSE: BERY).

The all stock deal is valued at a whopping US$8.4 billion (AU$13 billion).

Under the deal, Berry shareholders will receive 7.25 Amcor shares for each Berry share held upon closing. This will see Amcor shareholders own around 63% of the combined company, with Berry shareholders owning 37%.

Both company boards have unanimously approved the transaction, which values Berry at US$73.59 per share.

Following the merger, the beefed-up ASX 200 stock will rake in combined revenues of US$24 billion and adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of $4.3 billion.

Their increased scale of some 400 global packaging plants is expected to produce US$650 million in cost, growth and financial synergies by the end of the third year of the merger.

What did management say?

Commenting on the merger news that has yet to boost the ASX 200 stock, Amcor CEO Peter Konieczny said, "This combination delivers on our strategy to accelerate growth by putting the customer first, elevating the role of sustainability and orienting the portfolio toward faster growing, higher margin categories."

Konieczny added:

We will have a more complete and more sustainable product offering, supported by stronger innovation capabilities, global scale and supply chain flexibility.

We will help global and local customers grow faster and operate more efficiently with a team of exceptional talent. As a result, this combination also drives a step change in annual free cash flow, earnings growth and value creation for our shareholders.

Berry CEO Kevin Kwilinski said, "Our combination with Amcor is a logical next step in our company's evolution, and it is a testament to our entire team that we're well positioned to build on this momentum and deliver even more value to our shareholders."

Kwilinski added, "We will be better together, and I look forward to all we will achieve as a combined organisation."

The ASX 200 stock aims to close the deal with Berry in the middle of calendar year 2025.

Should you invest $1,000 in Amcor Plc right now?

Before you buy Amcor Plc shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Amcor Plc wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 7 February 2025

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Amcor Plc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Mergers & Acquisitions

Six smiling health workers pose for a selfie.
Healthcare Shares

Guess how much $5,000 invested in Sigma shares in December 2023 is worth now!

Sigma shares have soared over the past year alongside the merger with Chemist Warehouse.

Read more »

A person holds a stop sign in front of their head
Mergers & Acquisitions

This ASX All Ords stock is up 150% in a year. Here's why it's just been placed in a trading halt

Why is this stock out of action on Monday? Let's find out.

Read more »

Multiple ASX share investors take on one another in a tug of war in a high rise building.
Mergers & Acquisitions

Up 116% in a year, Insignia Financial share price rockets again as bidding war heats up

Insignia Financial shares have just attracted takeover interest from a third suitor.

Read more »

Mining workers in high vis vests and hard hats discuss plans for the mining site they are at as heavy equipment moves earth behind them, representing opportunities among ASX 200 shares as nominated by top broker Macquarie
Materials Shares

Fortescue shares charge higher on Red Hawk takeover boost

This mining giant is moving closer to getting a takeover deal over the line.

Read more »

A man in a suit face palms at the downturn happening with shares today.
Mergers & Acquisitions

Guess which $8 billion ASX 200 stock just failed with a takeover bid

It has been an embarrassing outcome for the blue chip stock.

Read more »

Man pointing at a blue rising share price graph.
Mergers & Acquisitions

Guess which ASX All Ords tech stock just rocketed 30% on takeover news

The ASX All Ords tech stock is bucking the broader tech sell-off today to rocket higher.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Mergers & Acquisitions

Fortescue shares slide on $254m Pilbara acquisition

This mining giant is making a new acquisition. Here's what it has announced.

Read more »

Ecstatic woman looking at her phone outside with her fist pumped.
Mergers & Acquisitions

Myer shares race higher on 'overwhelming support' for merger

The department store expects the merger to create a stronger business.

Read more »