425: Berry Global and Glatfelter Achieve Regulatory Milestone in Proposed Transaction

Berry Global and Glatfelter announced the expiration of the HSR Act waiting period, marking a regulatory milestone in their proposed transaction to combine Berry's Health, Hygiene and Specialties segment with Glatfelter.

Summary

• Berry Global Group, Inc. and Glatfelter Corporation announced that the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act has expired.
• This marks a regulatory milestone in the proposed transaction where Berry will spin-off and merge its Health, Hygiene and Specialties segment's Global Nonwovens and Films business (HHNF) with Glatfelter.
• The definitive agreement for this Reverse Morris Trust transaction was previously announced on February 7, 2024.
• The transaction aims to create a leading, publicly-traded company in the specialty materials industry.
• The deal is expected to close in the second half of calendar 2024, pending Glatfelter shareholder approval and customary closing conditions.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive as the announcement confirms progress in a significant strategic transaction. The expiration of the HSR waiting period reduces uncertainty, but the deal is still subject to shareholder approval and other closing conditions.

Positives

• The expiration of the HSR Act waiting period indicates progress towards completing the proposed transaction.
• The merger is expected to create a leading, publicly-traded company in the specialty materials industry.
• The combined company will benefit from the strengths of both Berry Global and Glatfelter.
• Glatfelter's 2023 revenue was $1.4 billion with approximately 2,980 employees worldwide.

Risks

• The transaction is subject to approval by Glatfelter shareholders.
• The transaction is subject to customary closing conditions.
• There are risks related to potential litigation brought in connection with the proposed transaction.
• The anticipated tax treatment of the proposed transaction may not be obtained.
• The integration of the combined company may be more difficult, time consuming or costly than expected.
• The announcement, pendency or completion of the proposed transaction may affect the ability of the parties to retain customers and key personnel.

Future Outlook

The transaction is expected to close in the second half of calendar 2024, subject to Glatfelter shareholder approval and customary closing conditions. The combined company aims to be a leader in the specialty materials industry.

Industry Context

The transaction reflects a trend towards consolidation and specialization in the specialty materials industry, as companies seek to gain scale and improve their competitive positioning.

Management Changes

Stakeholder Impact

• Shareholders of Glatfelter will vote on the proposed transaction.
• Employees of both Berry Global and Glatfelter may experience changes as a result of the merger.
• Customers of both companies may benefit from the combined capabilities and offerings.

Next Steps

• Glatfelter shareholders need to approve the transaction.
• The companies need to satisfy customary closing conditions.
• Spinco expects to file a registration statement in connection with its separation from Berry.

Key Dates