8-K: Berry Global and Amcor Address Stockholder Lawsuits with Supplemental Disclosures Regarding Merger

Berry Global and Amcor provide supplemental disclosures to address stockholder lawsuits related to the proposed merger, aiming to moot disclosure claims and avoid potential business delays.

Summary

• Berry Global Group, Inc. and Amcor plc are addressing lawsuits filed by purported stockholders concerning the proposed merger.
• The lawsuits allege that the Joint Proxy Statement/Prospectus omitted certain material information, rendering it incomplete and misleading.
• While both companies deny the allegations and believe the disclosures comply with applicable law, they are voluntarily supplementing the disclosures to avoid nuisance, expense, and potential business delays.
• The supplemental disclosures pertain to the background of the merger and the opinions of financial advisors.
• These supplemental disclosures should be read in conjunction with the Joint Proxy Statement/Prospectus.
• The Registration Statement as amended was declared effective by the SEC on January 23, 2025.
• Following the effectiveness of the Registration Statement, the Company and Amcor commenced mailing the Joint Proxy Statement/Prospectus to their respective stockholders on or about January 23, 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the announcement addresses litigation, it also reaffirms the companies' commitment to the merger and their belief in the adequacy of the original disclosures. The proactive approach to addressing legal challenges is a positive sign, but the existence of lawsuits introduces uncertainty.

Positives

• Berry and Amcor are proactively addressing stockholder concerns to mitigate potential disruptions to the merger process.
• The companies are transparently providing additional information to ensure stockholders have a comprehensive understanding of the transaction.
• The Registration Statement was declared effective by the SEC on January 23, 2025.
• The Joint Proxy Statement/Prospectus was mailed to stockholders on or about January 23, 2025.

Negatives

• The existence of stockholder lawsuits indicates potential dissatisfaction or concerns regarding the merger disclosures.
• Supplemental disclosures, while intended to be proactive, may draw further scrutiny to the merger details.
• The lawsuits allege that the Joint Proxy Statement/Prospectus omitted certain material information, rendering it incomplete and misleading.

Risks

• The ongoing litigation could potentially delay or complicate the merger process.
• Adverse rulings in the lawsuits could require further revisions to the merger agreement or impact the transaction's terms.
• The need for supplemental disclosures may indicate underlying issues with the initial information provided to stockholders.
• The risk that the conditions to the completion of the proposed transaction (including shareholder and regulatory approvals) are not satisfied in a timely manner or at all.

Future Outlook

The document contains forward-looking statements regarding the anticipated benefits of the proposed transaction, the impact on business and financial results, synergies, financing, and the closing date, all of which are subject to risks and uncertainties.

Management Comments

• While the Company and Amcor believe that the disclosures set forth in the Joint Proxy Statement/Prospectus comply fully with all applicable law and deny the allegations in the demand letters and Complaints, in order to moot plaintiffs disclosure claims and avoid nuisance and possible expense and business delays, the Company and Amcor have determined to voluntarily supplement certain disclosures in the Joint Proxy Statement/Prospectus related to plaintiffs claims with the supplemental disclosures set forth below (the Supplemental Disclosures).
• Nothing in the Supplemental Disclosures shall be deemed an admission of the legal merit, necessity or materiality under applicable laws of any of the disclosures set forth herein.
• To the contrary, the Company and Amcor specifically deny all allegations that any additional disclosure was or is required or material.

Industry Context

Mergers and acquisitions in the packaging industry often face scrutiny from regulators and shareholders, leading to litigation and demands for greater transparency. This announcement reflects a common practice of companies proactively addressing legal challenges to ensure the smooth completion of a significant transaction.

Comparison to Industry Standards

• It is common for companies undergoing mergers to face litigation from shareholders alleging inadequate disclosures.
• Companies like Dow and DuPont during their merger also faced similar lawsuits and provided supplemental disclosures.
• The EBITDA multiples used by Lazard and Wells Fargo Securities (7.0x to 11.5x) are within the typical range for packaging companies like Crown Holdings and Ball Corporation.
• Discount rates of 6.75% to 9.25% are also standard for discounted cash flow analyses in this sector.

Legal Proceedings

• The Company and Amcor have received several demand letters from purported stockholders of the Company and/or Amcor, as applicable, alleging, among other things, that the Joint Proxy Statement/Prospectus filed in connection with the Merger omitted certain purportedly material information which rendered such documents incomplete and misleading.
• Lawsuits were filed by purported stockholders of the Company in connection with the Merger under the captions Andrew Thompson v. Berry Global Group, Inc., et al. No. 650616/2025 (N.Y.) and Eric Miller vs. Berry Global Group, Inc., et al. No. 650690/2025 (N.Y.).
• The Complaints similarly allege that the Joint Proxy Statement/Prospectus filed in connection with the Merger omitted certain purportedly material information which rendered the Joint Proxy Statement/Prospectus incomplete and misleading.

Stakeholder Impact

• Shareholders are directly impacted by the supplemental disclosures and the ongoing litigation, as it affects the merger's progress and potential outcomes.
• Employees of both Berry and Amcor may experience uncertainty during the merger process.
• Customers and suppliers could be affected by any disruptions or changes resulting from the merger.

Next Steps

• Stockholders will review the supplemental disclosures in conjunction with the Joint Proxy Statement/Prospectus.
• The companies will continue to defend against the lawsuits and work towards satisfying the conditions for closing the merger.
• Shareholder votes will be conducted to approve the merger.

Key Dates